The #1 factor considered when buying a home: price/affordability
December 6, 2018
By Carla Staresina, Vice President, Client Relationship Management, Canada Mortgage and Housing Corporation (CMHC).
It comes as no surprise that the number one factor Canadians consider when purchasing a home is price/affordability. Buying the home that is right for you also means buying a home that fits within your budget and leaves you feeling comfortable financially.
In April 2018, Canada Mortgage and Housing Corporation (CMHC) surveyed 4,000 active mortgage consumers as part of its annual Mortgage Consumer Survey. This survey, conducted since 1999 and the most comprehensive of its kind in Canada, provides insight into the behaviours, attitudes and expectations of Canadians when they take out, renew or refinance a mortgage.
Here are the other key findings you need to know.
First-time buyers are spending a lot
Eighty-five percent of first-time buyers and 68% of repeat buyers spent the maximum price they could afford on their home. Buying a home is a big financial decision. Before you buy, ask yourself hard questions such as:
- Am I financially stable?
- Do I have the financial management skills and discipline to handle this large of a purchase?
- Am I ready and able to take responsibility for all the costs that come with being a homeowner?
Home buying costs are more than expected
Buying a home can lead to many unexpected costs you may not be anticipating. These can come early on in the home buying process or after you become a home owner.
According to the survey, about one-fifth of home buyers indicated they paid more than they had planned, and that their level of debt was higher than expected.
Ensure you are financially prepared by doing calculations, such as:
- Determining how much you would be spending each month with homeownership expenses added to your current financial situation.
- How much do you need to save to pay for the upfront costs of buying a home?
Many first-time buyers aren’t planning
Buying a home is likely the largest purchase you will ever make – and this requires proper planning. Once you are financially prepared to buy a home, start budgeting for your future expenses.
This year’s survey revealed that only 76% of first-time buyers and 62% of repeat buyers had a monthly budget. Also, only 64% of first-time buyers and 59% of repeat buyers had a monthly buffer for unexpected expenses.
CMHC’s Homebuying Step by Step Guide helps you look at housing options, expected costs and your personal financial situation, to help you decide whether homeownership is right for you. We also offer a series of home buying calculators to help you in your planning. For more information on the survey and its key findings, visit: 2018 Mortgage Consumer Survey Results.
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