Interest rates hit hard for renewers and homebuyers: CMHC 2024 Mortgage Consumer Survey

OTTAWA, ON, May 8, 2024 /CNW/ - Canada Mortgage and Housing Corporation (CMHC) released its 2024 Mortgage Consumer Survey today showing that affordability and rising interest rates continued to be some of the biggest factors impacting mortgage consumers.

In January 2024, CMHC surveyed nearly 4,000 recent mortgage consumers across Canada who renewed or refinanced a mortgage, or purchased a home in the past 18 months, to gain key insights into the current state of homeownership, mortgage lending and the expectations and experiences of mortgage consumers.

During the 18-month period covered by the survey, interest rates hit high levels not seen in years. Of those respondents who purchased a home, 22% said rising interest rates influenced their decision to buy a home sooner than planned, while 13% indicated they delayed their home purchase? nearly three times more than in 2023. Those most likely to postpone a purchase were first-time buyers (18%) and newcomers (26%). Significantly more mortgage consumers were impacted by rising interest rates ? 65% compared to 50% in the 2023 survey.

It took an average of 4.2 years for homebuyers to save for a down payment, with 30% of buyers receiving a gift to help with the cost. New this year, we explored current living situations and co-ownership arrangements. Results show that 12% of all respondents shared the purchase of their home with a roommate or an adult family member they reside with, other than a spouse.

Funding home improvements and renovations was cited as the top reason for refinancing an existing mortgage by 33% of respondents, out-pacing debt consolidation at 23%. Specifically, 12% of refinancers reported adding a suite to their home. Among mortgage consumers who renovated, improving home energy efficiency was the third most popular reason for renovating, accounting for more than half of overall renovation costs. Of those homeowners who renovated to improve energy efficiency, 93% were satisfied with the results and 68% saw savings in their 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."       

  ? Sam Carnovale, CMHC's Director of Client Relationship Management

• The Canadian mortgage landscape in 2024 overall was similar to that of 2023.
  
  
• The survey indicates 15% of Canadians took out a mortgage in the last 18 months, compared to 16% in 2023. Of those mortgage consumers, 62% were renewers (up from 58% in 2023), 19% were refinancers (stable), and 18% were homebuyers (down from 23% in 2023).
  
  
• While 63% of homebuyers continue to have concerns or uncertainty during the home buying process, a majority of mortgage consumers (79%) still believe it is a good long-term financial investment. 
  
  
• Almost two-thirds (65%) of homeowners expected the value of their home to increase in the next 12 months, up from 55% in 2023.
  
  
• Of the 30% of homebuyers who received a monetary gift to help with their down payment, 32% of them would not have been able to purchase a home that meets their needs without this gift. This is down from 37% in 2023.

View highlights from the 2024 Mortgage Consumer Survey.

CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to all levels of governments, consumers and the housing industry.

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SOURCE Canada Mortgage and Housing Corporation (CMHC)