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Majority of aspiring homeowners awaiting rate cuts before buying

A recent survey reveals that the majority of Canadians aiming to purchase a home are postponing their plans until next year or beyond, anticipating a drop in interest rates. According to the Bank of Montreal, 72% of prospective homebuyers plan to wait for borrowing costs to decrease, marking a 4% increase from last year. Analysts anticipate that the Bank of Canada will likely commence reducing its key lending rate in the latter half of the year. This move is expected to stimulate demand and stabilize the housing market, although significant rate reductions are necessary to restore affordability to previous levels, as noted by BMO Capital Markets senior economist Robert Kavcic.

Aside from interest rates, other financial concerns such as inflation and the high cost of living are deterring many individuals from purchasing homes this year, according to the BMO survey conducted by Ipsos among 2,500 respondents from February 28 to March 18.

While homeownership remains a significant aspiration for 62% of respondents, over half consider it unattainable due to financial strains and economic conditions. Despite 85% of respondents reporting progress in saving for their first home, financial anxiety persists, with unexpected expenses, climate-related risks like wildfires, and the overall high costs of homeownership ranking among top concerns.

Original Source: Canadian Mortgage Trends

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