A real estate sale sign in a west-end Toronto neighbourhood, March 7, 2020. Evidence suggests some young households are turning their backs on the housing market.The highest interest rates in years have taken a big bite out of demand for new mortgages, but one group in particular has been affected: young households. And the evidence suggests some of them are turning their backs on the housing market.
After seeing their mortgage debt grow faster than all other age groups during the frantic pandemic rush to buy houses, the average mortgage debt of young households is now shrinking. That’s not happening in any other age group. As Statscan notes, there are different reasons why that has been happening. The most positive interpretation is that existing homeowners in that age group who bought when rates were lower are paying off their mortgages.
Some younger homeowners may also be downsizing to more affordable homes, reducing the size of their mortgages in the process. But it’s also clear that some would-be first-time homeowners are simply unwilling or unable to get on to the bottom rung of the property ladder.