{"id":8814,"date":"2018-04-18T15:15:40","date_gmt":"2018-04-18T22:15:40","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=8814"},"modified":"2018-04-12T11:26:03","modified_gmt":"2018-04-12T18:26:03","slug":"todays-housing-market-for-millennials-generation","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2018\/04\/todays-housing-market-for-millennials-generation\/","title":{"rendered":"Today&#8217;s Housing Market for Millennials Generation"},"content":{"rendered":"<p style=\"text-align: justify;\">It\u2019s a debate that pre-dates the invention of avocado toast : which generation has had the toughest time breaking into the Toronto real estate market?<\/p>\n<p style=\"text-align: justify;\">Boomers, who purchased their single-family homes in the 1980s, point to the much higher cost of borrowing, while 90s buyers had a recession to contend with.<\/p>\n<p style=\"text-align: justify;\">But do these issues outweigh the skyrocketing prices and speculative demand that buyers have had to grapple with over the last eight years? With Statistics Canada reporting that two thirds of Millennials are still living with mom and dad, it\u2019s clear that today\u2019s generation of home buyers are facing greater affordability challenges than ever before.<\/p>\n<p style=\"text-align: justify;\">To find out how affordability has really changed over the last 30 years, a number of factors must be taken into account :<\/p>\n<p style=\"text-align: justify;\"><strong>Home Prices vs. Income Growth<\/strong><\/p>\n<p style=\"text-align: justify;\">The most obvious hurdle for today\u2019s home buyers is the sky-high cost of real estate. The average Toronto home sells for hundreds of thousands of dollars more today than it did in 1980, according to historical data from the Toronto Real Estate Board. Prices have risen from $101,626 to $806,071. That\u2019s a whopping 693% increase, and a difference of $704,445.<\/p>\n<p style=\"text-align: justify;\">Meanwhile, median household incomes \u2013 while seeing double-digit gains \u2013 fall far short of the appreciation for Toronto houses for sale, with earnings growing only 33%, from $58,700 to $78,280, according to the 2016 Canadian Census. Given this widening relationship between median income and average home prices, and it\u2019s clear overall affordability was better for the Boomers.<\/p>\n<p style=\"text-align: justify;\"><strong>But Aren\u2019t Mortgage Rates at Record Lows?<\/strong><\/p>\n<p style=\"text-align: justify;\">Perhaps the most compelling argument for Boomers is that it cost so much more to borrow in the 80s, compared to the historically low interest rates available today. Mortgage financing came with a price tag in the high teens back then, whereas today\u2019s homes can often be mortgaged at a contract rate that\u2019s sub-3%.<\/p>\n<p style=\"text-align: justify;\">However, looking at the average monthly mortgage payment in relation to price paints a less sympathetic picture. Assuming a 5% down payment and 25-year amortization, the average 1980s mortgage payment clocks in at $1,698 \u2013 less than today\u2019s average rent for a one-bedroom apartment. That increased to $1,777 in the 90s, $2,156 in the 2000s, and $3,615 today \u2013 a growth rate of 112.8%, and well outpacing that of inflation.<\/p>\n<p style=\"text-align: justify;\"><strong>It\u2019s Getting Harder to Pay Off Debt<\/strong><\/p>\n<p style=\"text-align: justify;\">Despite cheaper mortgage rates, Millennials\u2019 ability to service their debt pales in comparison to mortgage holders in previous decades, according to debt-to-income ratios. This affordability measure assesses how much is owed versus what\u2019s brought in by the household, and the higher the ratio, the tougher it is to satisfy monthly debt obligations.<\/p>\n<p style=\"text-align: justify;\">According to various loan studies, households with mortgage debt that exceeds a ratio of 43%, are most likely to struggle with housing costs.<\/p>\n<p style=\"text-align: justify;\">In 1980, the average debt-to-income ratio sat at 32%. This increased in moderate increments over the coming decades, edging to 35 per cent in the 90s, and 38% by the new millennium. However, Canadian debt loads ballooned with the onset of the 2010s, with the average ratio exploding to 59% in relation to rising home prices. This demonstrates that, even taking the double-digit rates of the 80s into account, mortgage payments take a bigger bite out of household expenditures today.<\/p>\n<p><a href=\"http:\/\/news.buzzbuzzhome.com\/2018\/04\/millennials-really-harder-todays-housing-market.html\" target=\"_blank\" rel=\"noopener\">Millennials Really Do Have It Harder in Today&#8217;s Housing Market<\/a> by Penelope Graham | Buzz Buzz Home<\/p>\n","protected":false},"excerpt":{"rendered":"<p>It\u2019s a debate that pre-dates the invention of avocado toast : which generation has had the toughest time breaking into the Toronto real estate market? Boomers, who purchased their single-family &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2018\/04\/todays-housing-market-for-millennials-generation\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-8814","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Today&#039;s Housing Market for Millennials Generation &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2018\/04\/todays-housing-market-for-millennials-generation\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Today&#039;s Housing Market for Millennials Generation &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"It\u2019s a debate that pre-dates the invention of avocado toast : which generation has had the toughest time breaking into the Toronto real estate market? Boomers, who purchased their single-family &hellip; [read more]\" \/>\n<meta name=\"twitter:creator\" content=\"@RoryClipsham\" \/>\n<meta name=\"twitter:site\" content=\"@RoryClipsham\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Rory Clipsham\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2018\\\/04\\\/todays-housing-market-for-millennials-generation\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2018\\\/04\\\/todays-housing-market-for-millennials-generation\\\/\"},\"author\":{\"name\":\"Rory Clipsham\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#\\\/schema\\\/person\\\/0672b9777e67473b9bd9247df49499c7\"},\"headline\":\"Today&#8217;s Housing Market for Millennials Generation\",\"datePublished\":\"2018-04-18T22:15:40+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2018\\\/04\\\/todays-housing-market-for-millennials-generation\\\/\"},\"wordCount\":552,\"publisher\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#\\\/schema\\\/person\\\/0672b9777e67473b9bd9247df49499c7\"},\"articleSection\":[\"Market Updates\"],\"inLanguage\":\"en-CA\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2018\\\/04\\\/todays-housing-market-for-millennials-generation\\\/\",\"url\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2018\\\/04\\\/todays-housing-market-for-millennials-generation\\\/\",\"name\":\"Today's Housing Market for Millennials Generation &#8226; 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