The Pride Of Ownership Remains Strong for First Time Home Buyers
Progress is happening all around us. The gradual reopening of businesses, services and public spaces is enhancing consumer confidence which has a positive impact on the Canadian economy and customer satisfaction.
Real estate is one of the fastest rebounding markets after a crisis and statistics prove this to be true, in both the 2009 crisis and the little blip we hit in 2017, the real estate market rebounded as nothing happened and now there has been a steady increase from month to month and week to week with respect to average home sale prices and new listings across southwestern Ontario. The number of listings and homes sold is also on an incline. As consumers become more confident in the market, the individuals who have been waiting for the ‘storm to pass’ will feel more comfortable making real estate decisions which will bring even more activity.
If you have heard the news about CMCH making a few changes that will reduce buyers purchasing and/or borrowing power you may be questioning your potential to purchase a home.
If you are amongst the many buyers who have spent the previous months or even years preparing to buy a home this spring probably share the same question: What now?
First time home buyers make up a large percentage of individuals who will take action and enter the real estate market 49% of first-time buyers are Millennials, age 25-34 years of age. This first time home buyer demographic has a much stronger financial fitness than the national average and 50% of these first time home buyers are motivated because they believe strongly that owning the place that they live in and building equity is a wise financial decision. The good news is that despite what CMHC’s plan may be, Canada’s other two mortgage insurers, Genworth Canada and Canada Guaranty, confirmed that they will not be following CMHC’s lead. There will be no guideline changes relating to, debt service ratios, minimum credit score, and down payment requirements.
Historically, over the longer term, homes have proven to increase in value, just look back at housing costs in the 80’s, 90’s and throughout the 200’s.
Unlike most things you buy, a home will almost certainly increase in value over time – which builds more and more equity. Each time you make your monthly mortgage payment, you build equity in a place of your own (unlike a rent payment). Equity is the difference between the value of the home and your outstanding mortgage. The longer you stay in your home (and the more payments you make), the more equity you’ll have. If you choose a home you can afford, the payoff can be great. As you build up equity in your current home and comfort level in being a homeowner, it may be easier to move up to another home in the future, not to mention the many other doors of opportunity homeownership opens for you.
Pride of ownership is the number one reason why people yearn to own their homes. It means you can paint the walls any colour you desire, turn your music up, attach permanent fixtures, and decorate your home according to your own taste. Homeownership gives you and your family a sense of stability and security. You don’t have these luxuries as a renter. Owning a home also gives you a new sense of pride in your surroundings and strong ties to your community.