Buyers prefer smaller down payments as market intensity decreases

Buyers prefer smaller down payments as market intensity decreases

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Canadian buyers are putting less for their payments on a home than they were a few months ago, potentially reflecting lower demand intensity, according to data provided by a national online brokerage.

Content of the article looked at data from its thousands of borrowers and found that the median down payment as a percentage of the home purchase price fell from a high of 20% in the spring to 12.5% ​​in August.

“Interest in buying homes has remained, but people’s interest in making a larger down payment is waning,” said Chase Belair, Co-Founder and Senior Broker.

He notes that the data trend is still too early to draw conclusions with any certainty.

“It could take another three to six months, but it’s interesting that we’ve seen that 20% drop was a goal for a lot of people, and now it’s not a primary concern.”

One of the reasons, he says, is that buyers are less concerned with getting approval quickly to enter the market due to the rapid rise in prices and lack of supply.

“There was a huge pressure to put in as much as they could because I believe people had a sense of urgency and they didn’t want to wait to see if they would qualify or not,” Belair says.

“There was a lot more rush and urgency, and that’s what really changed – the sense of urgency went down.”

At the same time, over the past four months, median purchase prices have remained stable across Canada, with the average cash down payment falling from $ 60,000 to $ 54,000, a decrease of 10 percent.

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