Buying a house is a significant life decision, and many Canadians wonder when the right time to purchase is. No “perfect” age exists, but data can provide good information about when most take the plunge into home ownership. A common question I get as a realtor is, “What is the average age at which people buy a house?”
What Do the Numbers Say?
It’s interesting to see how Canada’s average house-buying age has increased. According to a Globe & Mail article from 2022, the average age was 29 in the 1970s and 80s. In a 2021 report by the National Association of Realtors (an American organization), first-time homebuyers were 33 years old.
Another trend that continues to grow across Canada is women outpacing men in purchasing real estate. The Calgary Real Estate Board reported that in 2016, 27% of all Canadian homeowners were single women, and this number continues to grow as young single women see real estate as a good investment.
By 2019, The Canadian Mortgage and Housing Corporation (CMHC) reported that 61% of first-time and repeat homebuyers in Canada were female.
Why Are First-Time Home Buyers Getting Older?
Recent data shows that the average age of first-time home buyers who purchase a house in Canada is 36. This number has gradually increased due to several economic and lifestyle factors. But why is this the case?
Understanding why people are waiting longer to purchase a home will help you better prepare for your journey. Here are some key reasons for this trend:
Rising Home Prices: The Canadian real estate market has experienced significant price growth, especially in major cities like Toronto, Vancouver, and Montreal. As a result, it takes longer to save up the required down payment amount.
Student Loan Debt: Many Canadians spend their 20s and 30s paying off student debt, which delays saving enough downpayment money for a house.
Lifestyle Choices: People prioritize travel and career development before committing to home ownership.
Delaying Marriage and Family Planning: Family planning is one of the biggest motivators for buying a house. Delaying this pushes home ownership further down the road.
Job Stability and Career Growth: Building a stable career takes time. People prefer to put home ownership on hold until they feel financially secure.
Helping your children buy their first home? You may find these blogs helpful!
Is There a “Right Age” to Buy Your First House?
The “right age” to buy a house in Canada is not one-size-fits-all. In my opinion, the right time to buy a home is when you’re ready. When you feel ready, here are some things to consider: financial capability, lifestyle goals, and long-term plans. Here are some criteria to understand when you might be prepared to buy a house:
- You have sufficient down payment saved (ideally 20% down to avoid insuring the mortgage, but not mandatory). In some markets, having 20% down is nearly impossible to save. In markets like Toronto, the average price increases have risen faster than a person could save the extra amount to get 20% down, so the bar keeps moving.
- You have a secure job and a good credit score.
- You’re prepared for the responsibility of home ownership, including maintenance and an emergency fund.
How I Did It
I remember buying my first home in 1998 when I was 24. The path to homeownership was easier for me for several reasons. At the time, a detached bungalow in Whitby cost $120,000. I had 10% as a downpayment, $12,000 plus closing costs. My interest rate was 6.2% on a 5-year fixed-rate mortgage, amortized over 25 years.
It was cheaper to pay the mortgage and maintain the house at the time than renting something. The other variable was I bought the home with a friend. We sat with a lawyer and created a contract covering every scenario possible to protect us both. It was a great way to get into the market. This is still an excellent way for people to enter the market if you and your partner are aligned.
The Biggest Challenge For First Timers Today
I recently helped a young couple purchase their first home. The biggest challenge was the mortgage qualifying process. The stress test, higher interest rates, deciding to put 20% down versus putting down less, and having to insure the mortgage were all variables they had to navigate.
When we started searching for homes, it wasn’t long before they were discouraged by the quality of the houses they could buy. It was back to the drawing board, and the decision was made to go with a high-ratio mortgage.
It gave them more buying power, and they bought a beautiful home in their preferred neighbourhood. The cherry on top is that the house was turn-key and their style.
Preparing to buy your first home? Read these blogs for more advice!
- Should I Rent or Buy a Starter Home in Toronto?
- What Does it Cost to Buy a House in Scarborough?
- Legal Basement Apartment Requirements in Ontario
Tips For First-Time Buyers
Get Pre-Approved for a Mortgage
This is critical for helping you understand your budget. Being organized before starting your home search will reduce stress and chaos. It also positions you well with sellers, who prefer working with less risky buyers.
Know Your Numbers
Make sure you know what’s affordable to you. Understand all the associated costs and fees with purchasing your first home. Your real estate agent will be able to break this down for you. These include land transfer tax, lawyer fees, appraisal fees, home inspections, and adjustments at closing.
Don’t Rush
I suggest the 6 P’s for success: Prior, Proper Planning Prevents Poor Performance.
If you’re ready for your next chapter, want to purchase a home, and have questions, feel free to reach out to discuss all your options.
Looking to buy your first home? I can help! Give me a call at 647.283.2127 or email stuart@stuartnodell.com to get in touch.
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