September 20, 2023 – Toronto, Ontario – Mortgage Professionals Canada
The share of non-homeowners in Canada who think they will never be able to buy a home has increased by 15 percentage points over just six months. This figure stands at nearly half (48%) as of this summer, up from a third (33%) at the end of last year. This is according to our latest mortgage consumer survey, polling Canadians across the country in June and July for Mortgage Professionals Canada’s (MPC) latest Semi-Annual State of the Housing Market report.
For those who do own a home, the share who are considering selling because they cannot afford their current mortgage has increased more than three-fold from mid-2022 to mid-2023. These latest survey results are a clear indication of Canadians’ housing related stress in this high interest rate environment.
“Canadians are facing a housing affordability crisis with little sign of easing in sight,” said Lauren van den Berg, President and CEO of MPC. “We hear this every day from our members right across the country, and that is why we continue to advocate for policies that break down the barriers to homeownership.”
As part of the report, Oxford Economics prepared economic forecasting on behalf of MPC. According to the forecast, the Canadian economy is still headed for a mild recession this year, as highly indebted households are forced to pull back spending.
When it comes to rates moving forward, the Bank of Canada will likely pause rates at 5% until mid-2024 as labour markets ease and signs of a recession emerge, before gradually easing rates to a neutral level by early 2027. This will keep average mortgage rates at 6.1% for 2023, further impacting housing and affordability. As a result, the housing market downturn in Canada is now expected to extend into 2024 as the spring revival of resale housing comes to an end.
A further challenge mortgage holders will continue to face is renewing at higher rates. And the survey results show there is a wave of renewals coming. One in five borrowers (19%) expect to renew in the next year, jumping to more than two-thirds (65%) over the next three years. Up from the end of last year, 69% of respondents said they are anxious about renewing given the higher rates.
“The most important step you can take is to talk to a mortgage broker early on, especially if you are concerned with renewal,” said van den Berg. “They can work with you to provide expert advice and determine the best options for you. We see it in the survey results. Four out of five mortgage broker customers are likely to work with the same broker again at renewal or renegotiation.”
The share of the mortgage market occupied by brokers is also increasing gradually. Nearly one-third of respondents (31%) said that they have worked with a broker for their current home, up slightly from previous surveys. The demographic that remains most likely to work with a mortgage broker are younger buyers, Millennials and Gen Z, each at 41 percent.
We will continue to work with all levels of government to work together, along with our partners, to keep the dream of homeownership alive for Canadians.
Click here for access to the report.
The 20-minute online survey was conducted on behalf of Mortgage Professionals Canada by Bond between June 26 and July 12, 2023, with 1,949 respondents across Canada. The survey has been conducted for nearly 15 years on a semi-annual basis. Oxford Economics prepared the report with its economic analysis and forecasting.
About Mortgage Professionals Canada
We are Canada’s mortgage industry association with 15,000 members and more than 1,000 member firms. We are a non-profit association representing mortgage brokers and agents, as well as banks, lenders, insurers, and service providers, making up the largest network across the country.
We are proud to be the industry that provides Canadians with choice when making the most important financial decision of their lives and help people achieve the dream of home ownership. You can find one of our licensed members at findmeabroker.ca.
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