The Canadian Dream of Homeownership is Dimming for the Current Generation

Millennials and Gen Z are facing a significant decline in homeownership, according to a new report from Moody’s Analytics. The report highlights the challenges these younger generations are facing in achieving the dream of owning a home, which was once a key milestone on the journey to adulthood.

Since its peak in 2011, homeownership in Canada has been steadily declining, with renter households growing at twice the pace of owner households. This trend reflects the growing challenge many Canadians face in achieving homeownership, especially younger Canadians.

Factors contributing to this decline include higher interest rates and inflation over the past few years. Higher borrowing costs have significantly impacted aspiring homeowners’ budgets, while home prices have remained relatively stable. This has led to a cooling of homebuyer demand as the ability to enter the housing market has diminished.

The report also highlights the surprising trend in 2021 census data, showing that people aged 25 to 39, the prime first-time buyer age range, have the lowest homeownership rate and the most significant decline since 2011.

To address the housing affordability crisis, the federal government has introduced “Canada’s housing plan,” which includes measures to encourage home construction. However, achieving the goal of building two million additional homes by 2031 is highly ambitious and faces challenges such as worker shortages and an already strained construction industry.

Overall, the report underscores the challenges faced by younger Canadians in achieving homeownership and the need for innovative solutions to address the housing affordability crisis.