First National Financial LP®

Residential Market Commentary - Canadians remain committed to home ownership

  • First National Financial LP

In a year that gave many market watchers whiplash Mortgage Professionals Canada finds that, at the end of the day, nothing really changed very much, particularly when looking at consumer sentiment.

MPC’s annual “State of the Mortgage Market” collected nearly 2,000 responses to its online survey earlier this year.  Using a 10 point scale, respondents indicated whether they agreed, or disagreed, with each in a series of statements.  A response of 10 indicates complete agreement.  A one indicates complete disagreement.

  • There continues to be a high level of agreement that real estate in Canada is a good, long-term investment, rating 7.29 out of 10, down marginally from the long-term average of 7.34.
  • Mortgage debt is “good” debt, maintains a high level of agreement at 6.98, down slightly from the average of 7.04.
  • 6.93 believe they are in a good position to weather a downturn in housing prices, slightly higher that the 6.87 average.
  • 6.44 agree that they can manage an increase in interest rates, up from 6.36 last year (the first year the question was included).
  • 6.68 agree that low interest rates have encouraged home purchases by those who probably should not be homeowners.While this is the lowest level in the 11 year history of the survey, it just slightly below the average of 6.93.
  • At the same time just 3.62 out of 10 expressed regret about the size of the mortgage they took on.That’s down from the long term average of 3.75.

The responses to the last two statements seem to indicate that Canadian home buyers have confidence in their own decisions but question the wisdom of others.

Mortgage arears remain remarkable low at just 0.22%, down from 0.23% last year.

More than half (55%) of borrowers continue to get their new mortgages from one of the big banks, while 31% of all outstanding mortgages were arranged through a mortgage broker.  That jumps to 40% for mortgages obtained in 2020.

Respondents to the survey breakdown as follows:

  • 45% homeowners with mortgages
  • 29% homeowners without mortgages
  • 20% renters
  • 5% others

The full, 75-page, report is available here.