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Spring 2011 Housing and Mortgage Market Update: Summarizing the Stats

In recent weeks, a number of reports have been published on the housing and mortgage industry.  We know you hate having to scramble between materials to get a complete overview of the market, so we’ve done the work and summarized everything in one convenient place!

Mortgages by the numbers

  • Average mortgage: $150,000
  • Number of households who are mortgage-free: 3.75 million (39% of total)
  • Number of households with mortgages: 5.7 million (of 9.45 million households)
  • Percentage of Canadians who buy homes each year: 4.5%-5.5%

[It’s incredible to think that such small percentage of the market drives home prices for the rest of the population]

Mortgage rate type by popularity:housing market examination

  1. Fixed: 63% (3.6 million home owners)
  2. Variable: 30% (1.7 million home owners)
  3. Hybrid: 6% (350,000 home owners)
  • Variable rate mortgages are most popular with those aged 35 to 44
  • The average mortgage interest rate for home owners’ mortgages is 4.04%, only marginally lower than the last year’s average of 4.09%
  • Average amount of time it takes people to pay off a mortgage: 2/3 of the original amortization period
  • 50%of borrowers who have never increased payments or made a lump-sum prepayment
  • 11% of people who utilized their skip-a-payment privileges
  • 5% of people who missed a  mortgage payment they weren’t allowed to miss: 

[Missed payments have become slightly more common in recent years according to CAAMP data]

  • All things being equal, for every 1% that mortgage rates increase, households with an average income and a high-ratio mortgage can afford roughly 9% less house
  • Mortgage rate discounting remains widespread in Canada. During 2010 and 2011, the average typical discounted rate for 5-year fixed rate mortgages was 1.44 percentage points lower than typical “posted” rates
  • Sixty-one per cent of Canadians expect rates to increase in the next 12 months, according to a Canadian Association of Accredited Mortgage Professionals (CAAMP) poll

New mortgages trends (2010 – 2011)

Source of new mortgages:Housing Trends

  1. Banks: 49%
  2. Brokers: 27%
  3. Other: 24% (14% of these are Credit Unions)

[Overall broker share now sits at 23%, down over the last few years due to aggressive pricing competition from the banks]

  • Variable mortgages make up 35% of new mortgages

[Meaning variable mortgages are trending upwards, since overall they represent only 30% of mortgages.]

  • 41% of new mortgages have longer amortization periods (greater than 25 years), which is almost double the national average of 22%.
  • Although 35 year amortization periods were eliminated in March of 2011, 22% of new mortgages span 31+ years.

First-time home buyers

  • First-time homebuyers accounted for about one in every two homes sold in Canada in the past two years (more than a 250,000 sales per year).
  • Over one-fifth of first-time home buyers purchased a newly-built home.  Of these, about one in three opted for a condominium unit.
  • The majority of first-time buyers are in the under-35 age group with the 25-34 segment alone accounting for six out of every ten first-time buyers.
  • About one in four recent first-time buyers was a single-person household.
  • The average house price for a recent first-time buyer was about $273,000. This is about four times the average annual household income of about $69,000

Plus, a few figures on the exceptional Vancouver Housing Market

  • The housing market in British Columbia has been exploding recently and leading the charge is its largest city, Vancouver.  Residential sales in the metropolitan Vancouver area jumped up 25% from a year ago.  The numbers continued to climb in 2011, from January to February, sales have hiked up 70%.  Even into March, sales rose another 32%.
  • VancouverLast year, Vancouver had the third-highest housing costs among English-speaking cities worldwide, only behind Hong Kong and Sydney.
  • Vancouver`s median home price of $602,000 was almost ten times the annual median household income of $63,100.
  • The average home price in greater Vancouver rose 14% from 2009 to 2010.