CMHC finds increasing interest rates and affordability issues shape Canadian housing trends and consumer decisions
The Canada Mortgage and Housing Corporation (CMHC) has unveiled findings from its 2024 Mortgage Consumer Survey, highlighting how affordability and escalating interest rates are significantly influencing mortgage consumers in Canada.
In January, CMHC conducted a survey of nearly 4,000 recent mortgage consumers across Canada—including those who renewed or refinanced a mortgage or purchased a home in the past 18 months—to collect critical insights into the state of homeownership and mortgage lending.
The survey period, spanning 18 months, saw interest rates reach heights not observed in recent years. Among homebuyers, 22 percent reported that these rising interest rates prompted them to accelerate their home purchases, whereas 13 percent postponed buying—a substantial increase from 2023.
First-time buyers (18 percent) and newcomers (26 percent) were particularly likely to defer their purchases due to the financial climate.
On average, it took homebuyers 4.2 years to save for a down payment, with 30 percent receiving financial gifts to assist with this expense.
The survey also explored new dynamics such as co-ownership arrangements, revealing that 12 percent of respondents purchased their homes with a roommate or a non-spousal adult family member.
Refinancing for home improvements topped the reasons for refinancing, with 33 percent of respondents citing this motive, surpassing those consolidating debt at 23 percent. Of the refinancers, 12 percent added a suite to their home.
Moreover, more than half of the renovation expenses were for projects aimed at enhancing home energy efficiency, with 93 percent of these homeowners satisfied with the outcomes and 68 percent reporting reductions in energy bills.
“Concerns over housing affordability and interest rates continue to prove challenging for homebuyers in Canada. We are seeing that consumers and the mortgage professionals who serve them are working hard to facilitate viable solutions to housing financing challenges, such as co-ownership arrangements and refinancing for renovations. We are also seeing a strong uptake in the financing of home improvements for energy efficiency, which will bring immediate and long-term benefits to homeowners and their communities,” noted Sam Carnovale, CMHC's director of Client Relationship Management.
Further insights from the survey show that the overall Canadian mortgage landscape in 2024 remains similar to 2023's figures, with a slight shift in the composition of mortgage consumers.
The proportion of renewers has risen from 58 percent in 2023 to 62 percent in 2024, while the percentage of homebuyers has decreased from 23 percent to 18 percent.
Despite ongoing concerns during the home buying process, a majority (79 percent) of mortgage consumers still view home ownership as a good long-term financial investment, and 65 percent anticipate an increase in their home's value over the next 12 months.
The survey also indicated a slight decrease in the reliance on monetary gifts for down payments, with 32 percent of those receiving gifts stating they could not have otherwise purchased a home that met their needs, down from 37 percent in 2023.
