Having a family is expensive, as every parent knows.  Every child who has ever heard an exasperated parent utter the words, “Do you think I’m made of money?” knows it too, in a downcast, disappointed kind of way. The constant family tension between “I want” and “We can’t afford” is as old as family life itself. Sometimes you just can’t have everything you want. What, then, do today’s young people, eager to start families and households, think about their prospects? A survey of 1,700 Canadians done by the online mortgage comparison site RateSupermarket.ca provides some insight into where young people are in terms of their hopes for home and family.

A key finding is that more than half of Canadians feel they can’t afford both a home and a family. Many who want to start a family feel that they can’t do so in their current home, but the price of real estate is identified as an impediment to home ownership for fully 72% of millennials, and 55.6% of respondents in general. That in itself probably isn’t surprising : young couples have always had to save and wait until the right time to buy a home and start a family. A couple of factors complicate the picture today, however: existing debt and the cost of daycare.

These two facts of modern life present two of the biggest financial challenges younger people face. Nearly half said that existing debt was keeping them from growing their families. Understandably, but  worrying at the same time, a lot of millennials—60 per cent—who are ready to start families said they would have to rely more on credit to afford the day-to-day expenses of family life. Just over half of all survey respondents said that using credit was the only way they could see making ends meet while raising a family.  More than half of respondents said that family costs were more than they had expected, with the cost of food at the top of the list of unexpected costs.

Shockingly, a mere 15% said that they have access to affordable daycare in the area where they live. To compensate, young parents rely on various childcare strategies : calling on family and friends; hiring a nanny; being a stay-at-home mom or dad; working part-time. Almost half (48%) said that the cost of childcare had an impact on their ability to afford other things. Half of respondents (49.4%) said that the anticipated cost of raising kids has changed their minds about how many they will have.

The editor at RateSupermarket.ca, Penelope Graham, called it “disheartening” that Canadians increasingly feel that they have to choose between home ownership and their desire to be parents. “Rising home prices, especially in Canada’s urban centres, are making it tougher for millennials to follow their family dreams.”

Mortgage rates are low : shop around for the best rate

One factor that can play a favourable role for hopeful homeowners is the low cost of financing today. Among the best mortgage rates in Ontario as listed on RateMarket.ca are five-year fixed-rate at 2.44%; five-year variable-rate at 1.89%; and three-year fixed-rate at 2.14%.

It’s more important than ever, Graham says, for would-be homeowners to compare mortgage options and “boost their affordability” with competitive financing.

Survey highlights
• 54.5% said family costs were more than they anticipated
• The price of food topped the list of unexpected costs for parents at 26.5%
• 52.8% of respondents say they cannot start or expand their family in their current home
• 49.4% of respondents say they have changed their minds about their desired family size due to associated costs
• 71.4% of millennial respondents say they would need to make significant financial changes before starting a family, lead by increasing savings at 41%

High Real Estate Prices an Obstacle to Millennials’ Homeownership Dreams by Josephine Nolan | Condo.ca