Millennial homebuyers ‘facing bigger hurdles than ever before’

After finding out she was pregnant, Jamie-Lynn Morrow's search for a first home - which until that point had mostly involved online browsing - quickly accelerated.

I was working remotely, doing a lot of overtime as I was soon to be a single mother and was not sure if I would have been approved for a mortgage on my own," Morrow, who works as a credit underwriter, said in an email to The Spectator. It was a tough and stressful process."

In order to buy a two-storey townhouse in Stoney Creek for $394,000 - the list price - in July 2020, she lived with family for a while to save money.

I am proud to call myself a homeowner now, and so proud that I have done this all on my own," she said.

New research from Toronto-based fintech company Borrowell found Hamilton had the fourth-lowest average number of mortgages per consumer - an indicator of home ownership, especially among younger buyers - of the cities included in the study.

Among those ages 20 to 29, Hamilton had the lowest rate of home ownership. More than 700,000 credit reports were analyzed for the study.

According to Borrowell, older millennials" ages 30 to 39 - who are more likely to own a home than their younger counterparts - in Hamilton are less likely to buy a house than the same age group in other mid-sized cities, like London, Winnipeg, Calgary and Victoria.

However, they are more likely to own a home than those in Toronto and Vancouver.

Much like the rest of Canada, home prices in Hamilton have risen considerably over the past year," Eva Wong, co-founder and chief operating officer of Borrowell, said in an email to The Spectator.

In June, the average price of a house in Hamilton was nearly $788,000 - up 28 per cent from the previous year, she said.

Home affordability as an issue is becoming more and more prevalent, especially for those looking for their first home and who don't have equity in an existing property," Wong said. These individuals aren't able to leverage property value gains toward their first home, unlike those who have previously purchased a home."

Chinaza Chuks-Mady, 28, considers herself lucky. Equity from a downtown Hamilton home, now an investment property, purchased five years ago enabled her to buy a four-bedroom east Mountain home for $950,000 - about $100,000 over asking.

Chuks-Mady and her partner started looking for a home in April amid a red-hot real estate market and the pandemic's third wave, and ended up buying the first house they saw.

We wanted our family home," said Chuks-Mady, who works in corporate banking. So we thought, OK, let's see if we can get ahead of what we thought was going to be an even crazier time.'"

The Realtors Association of Hamilton-Burlington (RAHB) says real estate inventory in July remained at record lows," while average prices were steady. According to an Aug. 5 release, the average price of a residential property in the RAHB area, which spans from Burlington to the shores of Lake Erie, was $847,104 - down two per cent from the previous month, but up 22 per cent from the same time last year.

The pandemic has activated homebuyers across the country in large metropolitans and smaller suburbs, which has led to considerable demand and housing price increases across the board," Andrew Graham, co-founder and CEO of Borrowell, said in a release. Millennials in certain cities are facing bigger hurdles than ever before when it comes to purchasing a home, even if they have a good credit score."

Higher education administrator Mike Cupido, 35, said he and his wife were fortunate to buy before the market took off. They bought a west Mountain home with a spacious backyard for $815,000 - just under asking - in April 2020, about a month before they sold their townhome over asking.

We wanted a house with a spacious backyard for our dog ... we also wanted space in the basement for a home gym, which we have built over the pandemic," he said. Had we waited until the same time in 2021, we would not have been able to afford our home."

Kate McCullough is a Hamilton-based reporter covering education at The Spectator. Reach her via email: kmccullough@thespec.com