First-Time Homebuyers more Prepared in 2013

First-time homebuyers continue to adjust to the rules that are being placed in front of them, says a recent survey by our friends over at Genworth Financial.

An annual poll by Genworth asked 1,514 Canadians questions about their financial well being, specifically asking how prepared they are to make their first home purchase. The survey showed that there has been a significant rise in the amount of first-time buyers who put down more than 20 percent on their home purchase in 2013 when compared to 2012. 56 percent of those surveyed suggested that they put down more than 20 percent on their home purchase, up significantly from the 26 percent that was reported in 2012. In addition, 50 percent of those asked felt that it was getting harder to save for a down payment, which is also a 5 percent decline from 2012's numbers.

"Canadians entering the real estate market are making financially astute choices by saving longer and putting down larger deposits on their homes," said Brian Hurley, Chairman and CEO of Genworth Canada. "They continue to value homeownership and are being responsible about the way they enter into mortgage debt. This trend bodes well for a soft-landing of the housing market."

Additionally, the amount of first-time homebuyers who are saving for a short term purchase has declined. The amount of people who are looking to make a purchase in less than two years is down 30 percent, while those who are saving for a purchase in the next five years has risen by more than 50 percent.

"There is still a strong need for Canadians to have a better grasp on their financial situation," said Henrietta Ross, CEO of Canadian Association of Credit Counselling Services (CACCS). "More than 40% don't think their credit rating reflects them or don't know what their credit rating is. Counselling could help ensure they are financially prepared to enter and maintain substantial investments, such as homeownership."

The interviews were collected online last month.

So what does this tell us? It looks like first-time homebuyers are more prepared this year. They are ensuring that when they do choose to purchase, they will do so with a significant down payment. Sounds to us like Canadian purchasers, as we have seen in the past, are continuing to show excellent judgement as they enter the real estate market.