First Time Homebuyers Seek Freedom from the Rental World
OK, so you’re tired of paying rent, tired of living somewhere you really can’t update or paint your favorite color and you just want to get your own space. It may be tempting to rush out and buy a home, any home, to gain some feeling of independence but you’d be better off if you took the time to study the situation.
The Canada Mortgage and Housing Corporation, or CMHC for short, recently took a survey of 500 first time home buyers, both those who were still looking and those that had already moved into that first home. They also held a focus group on the subject. Between the two studies CMHC gained valuable information on the process.
A marked difference in the real estate world was the number of first time home buyers that started their home search online, 72 percent. Repeat buyers took that step only 29 percent of the time. In the computer age that’s not surprising as consumers and the real estate world have embraced technology. You used to have to go to a real estate office to get in-depth listing information. Now all you need to do is search online.
The reasons for finding a home aren’t all that surprising either. One favorite was not having to pay rent and the other high scorer was to own their own space. Places like Edmonton and Calgary that are seeing a vast influx of young people to fill available jobs are familiar with those sentiments. These are two places in Canada where the rental pool is tight, causing landlords to raise rents. The vacancy rates in both cities are less than 1.5 percent, putting those landlords in the driver’s seat. Rents are expected to go up by some 6 percent each year. It already costs renters in Edmonton an average of $1,150 per month to rent a typical two bedroom apartment.
As far as the “get my own space” issue, part of that is wanting the freedom to paint the walls bold colors, change out light fixtures or redo the kitchen. The other part is knowing that the money coming out of your wallet each month is going towards building your own equity rather than paying off someone else’s mortgage.
Most people in the first time home buyer crowd are under 35 and many have not peaked in their respective careers. That means they have less money coming in than most repeat home buyers. That does present more of a challenge, particularly in a market that is rapidly settling into a seller’s market. That’s one reason why first time home buyers, particularly in hot markets like Edmonton and Calgary, will gravitate towards condos and townhome. They are more affordable. Condos also tend to have more amenities that younger buyers appreciate like pools, gyms and club houses.
Looking for that first home might start out as a way to escape the landlord and the restrictions associated with renting. Often once the search is underway it becomes more about seeking personal freedom on a number of levels. Being responsible for a home and mortgage does wonders for the self esteem, and that’s a very big plus.