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First-Time Homebuyers Showing Their Rational Side

Stocks in this article: MIC

Genworth Canada Releases Results of Homeownership Study

TORONTO, April 8, 2013 /CNW/ - According to a national survey conducted by Genworth Financial Mortgage Insurance Company Canada (Genworth Canada), first-time homebuyers are adjusting to the new mortgage requirements and making informed choices about homeownership.

The annual poll, completed in conjunction with the Canadian Association of Credit Counselling Services (CACCS), asked 1,514 Canadians questions about their financial well-being and preparedness.  The 2013 survey revealed that there was a significant rise in the number of recent first-time buyers who say they put down more than 20% on their homes (56% vs. 36% in the 2012 survey). In fact, the number of people that said it is getting harder to save for that down payment is on the decline (50% vs. 55% in 2012) with more first-time buyers finding it easier to save money (9%, up from 5% in 2012). In addition, only 17 per cent of respondents thought it was a good time to buy, suggesting that low interest rates alone are not enough to entice Canadians to purchase a home.

"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."

Among first-time homebuyers, the proportion saving for less than two years has decreased by nearly 30%, while the proportion saving for more than five years rose by more than 50%. This appears to indicate that fewer first-time homebuyers feel a sense of urgency about entering the real estate market, which is consistent with the fact that fewer expect house prices to rise in the next twelve months.

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