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Money Mortgage borrowing among Canada's millennials sees major pullback

20:31  13 june  2018
20:31  13 june  2018 Source:   huffingtonpost.ca

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There's been a steep drop-off in the volume of mortgages that Canada ' s millennials are taking out, a sign that the country's faltering housing market could see more weakness ahead. But the drop-off in mortgage borrowing , particularly among millennials , suggests further downward pressure on the

Furthermore, 18% typically decline to leave any amount when presented with pre-entered tipping options in a taxi/Uber/Lyft, at a food truck, at a coffee shop and so on, versus 12% of older adults. Mortgage borrowing among Canada ' s millennials sees major pullback .

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There's been a steep drop-off in the volume of mortgages that Canada's millennials are taking out, a sign that the country's faltering housing market could see more weakness ahead.

According to new data from credit bureau TransUnion, new mortgage originations among millennials in Canada fell by 19.5 per cent between the last quarter of 2017 and the first three months of 2018, when tougher new federal mortgage rules kicked in.

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“The vast majority of Canadian families are two income earners and many will argue that it is better to wait until 65,” he says. Thus, taking it early is an borrowing among Canada ' s millennials sees major pullbackThere's been a steep drop-off in the volume of mortgages that Canada ' s millennials

That’ s down from 169.7 percent in the fourth quarter and the record high of 170 percent in Q3 last year. Borrowing by Millennials Sees Major Pullback . While home sales are down across the country, there’ s been a disproportionate drop-off in mortgage originations by millennials

That's a much steeper drop-off than seen in other age groups. For the country as a whole, mortgage originations were down 8.8 per cent, and among the elderly pre-war Silent Generation, mortgages actually grew by 7.8 per cent.

a man standing in front of a building: There's been a steep drop-off in the volume of mortgages that Canada's millennials are taking out, a sign that the country's faltering housing market could see more weakness ahead. © Provided by AOL Inc. There's been a steep drop-off in the volume of mortgages that Canada's millennials are taking out, a sign that the country's faltering housing market could see more weakness ahead. The older generation is likely borrowing against the value of their home to finance their lifestyle, while "millennials may find themselves unable to afford more expensive housing, and hence are opting for lower-value homes," explained Matt Fabian, director of research and analysis at TransUnion Canada, in a statement.

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Follow Back . Burlington, Ontario. Canada . Canada ’ s millennials still dream of home ownership – and make it happen # Millennials #DreamHome #homeownership #RMAbroker https Mortgage Borrowing Among Canada ' s Millennials Sees Major Pullback # Millennials # Mortgage # Canada

For Fabian, the drop-off in mortgages raises some questions. "Are consumers taking a wait and see approach to the new qualifying rules that came into effect? Are they pausing to measure the effect on home prices? One might have thought that consumers would rush to purchase homes before the new rules come into force to ensure they qualified for the highest loan amounts, but they don't appear to have done that."

Earlier on HuffPost Canada:

  • This Is The Best Place In Canada To Buy Real Estate, According To MoneySense
  • Canada's Housing Market Faces A Decade Of Stagnation: BMO


Millennials shifting their attention to lower-priced condos may explain why the condo market has held up better than single-family homes over the past year. But the drop-off in mortgage borrowing, particularly among millennials, suggests further downward pressure on the housing market in the months ahead.

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Housing market experts are counting on the large millennial generation to hold up Canadian real estate in the coming years, despite high prices in some markets and the prospect of rising mortgage rates. According to research released this week by real estate advisory firm Altus Group, four in 10 housing purchases in Canada are now carried out by millennial buyers.

That study found the average age of a first-time home buyer in Canada is 32, and the average household income of a first-time buyer is $85,000.

Canadians managing debt well, despite higher levels

Overall, the TransUnion report found that Canadians are handling their debt payments well despite growing debt levels. Non-mortgage debt climbed by 4.5 per cent from a year earlier at the end of 2017, to an average of $29,181. And despite the drop-off in new mortgage originations, the average size of a new mortgage was up 3.5 per cent, to $284,000.

a screenshot of a cell phone © Provided by AOL Inc.

But delinquency rates on debt are on the decline. The serious delinquency rate on mortgages (60 days overdue or more) was 0.5 per cent at the end of last year, down slightly from a year earlier. The 90-day delinquency rate on non-mortgage debt also declined slightly, to 5.4 per cent.

"We continue to see strong consumer credit performance over the past year, with apparently limited impact due to the rising interest rate environment," Fabian said.

This article originally appeared on AMP: HuffPost Canada at https://www.huffingtonpost.ca/2018/06/13/mortgage-borrowing-millennials-canada_a_23458133/ 

Follow @MSNMoneyCanada on Twitter. 

Are millennials skimping on tips? .
About 10% of millennials say they usually leave nothing as a tip for a server when dining out at a restaurant, but they aren't the only demographic that is stingy.About 10% of millennials say they usually leave nothing as a tip for a server when dining out at a restaurant, compared to just 3% of those who are older. Furthermore, 18% typically decline to leave any amount when presented with pre-entered tipping options in a taxi/Uber/Lyft, at a food truck, at a coffee shop and so on, versus 12% of older adults.

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