Mortgage consumers are increasingly anxious about their financial situation, particularly the prospect of renewing their mortgage at higher interest rates, according to Mortgage Professionals Canada’s Semi-Annual State of the Housing Market Report.
The survey found that three quarters (76%) of those facing renewal in the next 12 months report being anxious about their renewal, an increase of 10 percentage points since last year. Meanwhile, seven out of 10 Canadians (70%) say they are anxious about their family’s financial situation over the coming months, an increase of 17 percentage points from last year.
Concerns about affordability aren’t just limited to current homeowners. MPC’s survey reveals non-owners are more pessimistic than ever about their prospect of being able to purchase a home.
More than half of non-owners (51%) now believe they will never purchase a home, up from 18% two years ago. Just 16% of non-owners are currently planning to purchase a principal residence in the next 24 months, a drop of seven points from a year ago.
“Canadians are grappling with an unprecedented housing affordability crisis, exacerbated by ongoing high interest rates and economic uncertainty,” said Lauren van den Berg, President and CEO of MPC. “Our findings highlight the urgent need for policies that address these challenges and support both current and aspiring homeowners. We remain committed to advocating for measures that will make homeownership more accessible and sustainable for Canadians.”
MPC’s semi-annual report based on data collected from over 2,000 Canadians. The survey is conducted, and tabulated by partner firm Bond Brand Loyalty.
Consumers are increasingly pessimistic – highlights
- 55% are well-positioned to handle an increase in mortgage rates (-5 pts from 2022)
- 33% regret taking the size of mortgage that they did (+7 pts from 2022). Of those renewing in the next year, 43% regret taking on the size of mortgage that they did.
- 23% say a small increase in rate will cause them trouble making payments
- 9% say they are currently having trouble making payments (vs. 6% in 2022)
Canadians remain positive toward real estate
Despite elevated anxiety caused by higher interest rates and an uncertain economic backdrop, Canadians continue to view real estate as a good long-term investment. Roughly eight in 10 respondents view real estate as a good long-term investment, up seven points from last year.
Another 77% classify a mortgage as “good debt,” up from 68% last year, and more than half of Canadians (52%) are positive about Canada’s economy over the next 12 months (+8 pts).
“Despite the current challenges, Canadians’ confidence in real estate as a sound long-term investment remains strong,” said Joe Jacobs, Chair of MPC’s board of directors. “This enduring belief underscores the importance of working with a mortgage professional. Our expert and objective advice helps cut through the noise so that we can help you find the solution that’s right for you, especially during this environment of economic uncertainty.”