We are one quarter into 2024 and the Canadian housing market has already seen some shifts from 2023.
For one, the Bank of Canada has paused raising its interest rates and it currently sits at 5% at the time of writing. Because of the higher rates, we are still seeing less demand from buyers and a lower amount of activity in the market so far this year.
Additionally, the Canadian Real Estate Association (CREA) writes, “home sales and prices were mostly unchanged on a month-over-month basis in March 2024.”
The spring usually brings about increased activity, but we are off to a slower start this year. However, Larry Cerqua, Chair of CREA, says, “While the official March monthly numbers were quite flat, anecdotal evidence from late last month and early April suggests activity is ramping up.”
For millennials looking to make a purchase this year, a market like this might seem intimidating. However, homeownership is a major milestone that millennial home buyers are looking to achieve this year to kickstart their family, enhance their investment portfolio, or to find their dream home.
Topics We’ll Explore
In this blog we will take a look at the following topics:
- Understanding Millennial Home Buyers
- Financial Planning for Future Homeowners
- The Home Buying Process in 2024
- Finding the Right Home in Your Local Housing Market
- Navigating the Current Real Estate Market
- After the Purchase: Settling into Your New Home
Let’s dive into the home buying guide for millennials!
Understanding Millennial Home Buyers
Millennial homebuyers are likely a main interest for many real estate groups and agents as they have recently surpassed the Baby Boomer generation as the largest group of buyers in 2024, at 38%. Additionally, millennial homeownership rates have increased over the past few years.
While older generations were eager to get their foot in the market with less debt and lower interest rates following them around, millennial homebuyers have been slower to enter and engage in the real estate market, due to conflicting priorities, higher interest rates and home prices, and a competitive market.
This group of buyers, ranging from age 28-43, are either well into their career and family journeys or navigating student loan debt as recent graduates. This also likely means that their average down payment budgets can vary dramatically, depending on their age, career, family, financial health, debt to income ratio, and other factors.
Some factors that play a significant role in millennial homeownership include smart home technology, energy efficient appliances, sustainability, space for remote work, local neighborhood amenities, strong community, access to public transportation, and more.
Overall, affordability is a critical factor for millennials as they keep up with ongoing expenses and maintenance costs, credit card debt, inflation, global economic shifts, high interest rates, and other monthly payments.
Financial Planning For Future Homeowners
As we’ve hinted at above, many millennials and first time buyers in 2024 are navigating a different financial landscape than that of the other generations and age groups before them. With student debt, high interest rate trends, inflation, high median home price, and other unforeseen expenses, financial literacy and long term financial planning play a pivotal role.
With the majority of their monthly income going to rent fees, groceries, and other bills, it is vital for millennial homebuyers to have a strong financial plan, especially while navigating such a dynamic market and saving for a mortgage payment.
To get started, it’s important to create a budget that outlines monthly expenses and identifies areas where costs can be cut to save for a down payment. For some first time buyers, co-ownership with a parent or other family member might make affording the mortgage rates and down payment more accessible.
Additionally, focus on improving your credit score by paying bills on time, keeping credit card balances low, and disputing any errors on your credit report.
When exploring mortgage options and mortgage terms, consider programs tailored to first-time buyers, such as FHA loans or down payment assistance programs offered by the provincial and federal government.
The Home Buying Process in 2024
In 2024, advancements in technology have revolutionized the home buying process, making it more accessible and efficient than ever before.
Start by getting pre-approved for a mortgage to determine your budget and demonstrate your credibility to sellers. Having these two pieces prepared before you start looking can help streamline the homeownership journey and prevent overspending.
Next, enlist the help of a reputable real estate agent who understands your unique needs and priorities. At Voortman Realty, we prioritize our client’s needs, whether you’re a first time buyer or an experienced investor. With our guidance, you can explore listings online, attend virtual open houses, and schedule in-person viewings of properties that catch your eye.
When you’ve found a home you’re interested in, your real estate agent will help you with drafting an offer, negotiations with the seller, finalizing the sale, and going over any closing costs and property taxes that will be applied.
During this time, any home inspections will need to take place. Once inspections are completed and approved, any final details can be completed to solidify the purchase!
Finding the Right Home in Your Local Housing Market
When searching for your next or first home, it’s essential to prioritize factors that align with your lifestyle and long-term goals. However, it’s important to have your list of non-negotiables outlined so that you can be a bit flexible on other things, especially for first time homebuyers
Consider features such as energy-efficient appliances, smart home technology, and flexible living spaces that can adapt to your evolving needs.
Additionally, think about location preferences, whether you’re drawn to the excitement of urban living, the tranquility of suburban neighbourhoods, or the serenity of rural landscapes. Utilize online tools and resources to research neighborhoods, compare listings, and create a checklist of must-have amenities to guide your search.
Voortman Realty agents are also well versed in Hamilton area neighbourhoods and can help you find the right one for you!
Navigating the Current Real Estate Market
For most millennials, making their first home purchase is a momentous occasion. Homeownership goals vary from person to person, but navigating the real estate landscape while sticking to your home and financial goals is critical.
3 Tips To Consider When Entering the Housing Market
Here are a few tips on navigating the ever changing market in Ontario and making informed decisions.
1. Financial Preparedness:
With high-interest rates, it’s crucial to ensure you’re financially prepared before entering the housing market. Start by reviewing your budget and assessing your ability to afford various mortgage options at higher interest rates on your home’s purchase price. (According to CREA, “the actual (not seasonally adjusted) national average home price was $698,530 in March 2024, up 2% from March 2023.”) Consider debt consolidation and saving for a larger down payment to reduce your loan-to-value ratio and potentially secure a better mortgage rate.
2. Patience and Flexibility:
In a market with low demand, it’s essential to approach your home purchases with patience and flexibility. Be prepared to wait for the right opportunity to arise and consider expanding your search criteria to include a wider range of properties. While inventory may be limited, staying open-minded can increase your chances of finding a suitable home with affordable living costs.
3. Negotiation Tactics:
With decreased competition among buyers, there may be opportunities to negotiate favourable terms with sellers. Take advantage of the low demand by submitting offers below asking price and negotiating concessions such as closing costs or home improvements. Working with an experienced real estate agent can help you navigate the negotiation process effectively.
After the Purchase: Settling into Your New Home
As the excitement of becoming a homeowner settles in, it’s time to transition into the next phase: settling into your new abode. While moving into a new home can be both exhilarating and overwhelming, with proper planning and organization, you can make the transition smoother and more enjoyable.
4 Tips For Settling In
1. Unpacking and Organizing:
The first step in settling into your new home is unpacking and organizing your belongings. Start by prioritizing essentials such as kitchenware, toiletries, and bedding to make your new space functional from day one. As you unpack, take the opportunity to declutter and donate or discard items you no longer need or want. Establish a system for organizing your belongings, whether it’s by room, category, or frequency of use, to maintain a tidy and clutter-free living environment.
2. Personalizing Your Space:
Make your new house feel like home by adding personal touches and decor that reflect your style and personality. Hang photos, artwork, and mementos on the walls to create a sense of warmth and familiarity. Invest in comfortable furniture and textiles that make your space inviting and cozy. Consider incorporating plants, candles, and other decorative accents to add texture and ambiance to your home. By infusing your personal taste into your surroundings, you’ll create a space that truly feels like your own.
3. Engaging With Your New Community
One of the joys of homeownership is becoming a part of a vibrant and welcoming neighbourhood community. Take the time to explore your new surroundings and introduce yourself to your neighbours. Attend community events, block parties, and local gatherings to meet new people and connect with fellow residents. Join neighbourhood social media groups or community forums to stay informed about local news, events, and initiatives. Take advantage of nearby shops, restaurants, and recreational facilities to integrate yourself into the community and meet your neighbours. By actively engaging with your neighbourhood community, you’ll forge meaningful connections and establish a sense of belonging in your new home.
4. Home Maintenance and Safety:
Maintaining your new home is essential for preserving its value and ensuring your comfort and safety. Familiarize yourself with basic home maintenance tasks such as changing air filters, testing smoke detectors, and cleaning gutters. Create a maintenance schedule to keep track of regular upkeep tasks and address any issues promptly. Invest in home security measures such as deadbolts, motion-sensor lights, and a security system to protect your property and give you peace of mind.
Working With Voortman Realty
Working with an experienced realtor can make all the difference as you navigate an ever changing market.
Even though buying a home for the first time may seem intimidating and impossible, but with the right resources and experts on your side, the process can be very fulfilling!If you’re ready to dip your toe into the housing market, contact Voortman Realty today to see how we can help you!