Sky-high prices, monstrous down payments, daunting mortgage interest rates and income-gobbling monthly payments be damned.
Young (and not so young) and single Canadians are willing to go it alone when it comes to buying a home and attempting to pay the mortgage on their own, too.
"A lot of young professionals will apply for a mortgage as a single person, just to see what happens" explained mortgage broker Aaron Marsh of Rampone-Marsh Mortgages in Kelowna.
"With today's high interest rates and high prices, most don't quality, but that doesn't stop them from trying."
It's that sort of can-do attitude that permeates the 2024 Renter to Homeowner Survey by Point2 Homes, an international real estate search portal.
This survey was Canadian specific and uncovered the optimism and determination singletons have when it comes to home ownership on their own.
The main finding in the study is that 42% of all renters are considering applying for a mortgage alone despite high home prices and mandatory down payments.
Despite the realities of high real estate prices and down payment requirements, only 39% of rents cite high prices as their main hurdle to home ownership and only 27% have down payment worries.
More and more people are living alone in Canada and are willing to put home ownership first and marriage second.
"A dual-income couple is the most successful when it comes to qualifying for a mortgage," points out Marsh.
"But, then again there's also lots of couples who separate and then try to get a mortgage on their own."
To put this in perspective, even if a single person has an annual income of $100,000, which many would consider pretty good, they can only qualify for a mortgage for a home priced at $405,000.
That's taking into account the minimum 5% down payment for a first-time buyer, which is $20,250, and a five-year fixed mortgage interest rate of 5%.
Such a mortgage would carry a monthly mortgage repayment of $2,327.
Now, only the smallest of condominiums can be found in Kelowna priced at $405,000 or under, so options are limited.
In fact, the benchmark selling price of a typical condo in the city is $493,800, a townhouse $779,200 and a single-family home a whopping $1,025.200.
So, going it alone at any of those price points requires a gargantuan salary, massive downpayment and-or a generous cash gift from the bank of mom and dad.
"Although the reasons vary depending on the generation, the number of Canadians living alone is increasing and they are increasingly becoming comfortable with the idea of taking up the challenge of home ownership on their own," said Andra Hopulele, the writer of the Point2 study.
"Young adults and single people are starting to separate two ideas that truly seemed inseparable -- buying a home doesn't necessarily mean they need to find a partner and get married and getting or being married isn't a prerequisite for home ownership."
The Point2 survey went on to reveal that 72% of generation Z renters under age 25 aim to buy a home within the next year and 74% of them have saved up to $30,000 for a down payment.
That's impressive.
Younger millennials, those under age 35, aren't as determined as gen Z, likely because they know the reality.
As such, 57% of younger millennials still hope to buy within a year, with 76% of them saving up to $50,000.
Half of older millennials, those age 35 to 44, are willing to consider buying a home with a spouse.
Almost half of generation X renters age 45 to 54 are willing to try buying alone, but are the most likely to worry about their credit scores.
Baby boomers age 60-plus are the most likely to already be homeowners.
If they're moving, it's probably to a smaller single-family home as they look to downsize.
See the full Point2 survey here: https://www.point2homes.com/news/canada-real-estate/the-new-canadian-homebuyer-is-the-solo-homebuyer.html
Thumbnail photo credits: Roberto Nickson on Unsplash and Thought Catalog on Unsplash
