Consumers say now a good time to buy

The study found about 90% of recent home purchasers believe homeownership is a good long-term investment and 70% think now is a good time to purchase a home.

Canadians also demonstrated a sound understanding about the mortgage process and how their lenders assess eligibility, with 86% of respondents aware the level of total housing and other monthly payments should generally not exceed 40% of gross household income, says Francois Blouin, director, insurance products and strategic direction at CMHC.

“Given the current economy, this study indicates Canadians continue to be optimistic about homeownership and are astute mortgage consumers,” says Blouin.

“Our results reaffirm what we have seen in previous surveys — when it comes to their mortgages, Canadians are informed and manage their debt prudently.”

The survey is supported by recent activity in the Calgary housing market.

MLS sales in May reached 1,584, 16% higher than May 2008 and the first year-over-year increase since September.

About 70% of sales were under $400,000, lending to speculation first-time buyers are re-entering the market after being forced to the sidelines by high prices.

“A pent-up demand has been building, with many first-time home buyers now taking advantage of affordable prices, record low interest rates and federal government incentives,” says Bonnie Wegerich, president of the Calgary Real Estate Board.

In the new home market, starts in May reached 480, the highest monthly total for the year and included 382 single-family starts, about 19% off last May’s starts, and the smallest year-over-year gap this year.

Builders are offering exceptional prices and incentives and as a group say they are also seeing more first-time buyers.

It would appear starts for June and July will be strong — April building permits issued by the City of Calgary included 478 for single-family homes, while May’s permits included 178 for single family homes.

The CMHC survey indicates the people buying those homes are prudent mortgage managers — 75% of purchasers have a goal to be mortgage free sooner than their original amortization date, with 20% of mortgage holders reporting they have made a lump sum payment to their mortgage to their mortgage.

Recognizing the security provided by mortgage insurance, 80% of recent purchasers believe mortgage loan insurance is an important benefit to the financial system.

Canadians are mostly pleased with their dealings with those in the mortgage industry, with 77% of recent purchasers expressing satisfaction with the service received from their lender or broker.

“Canada’s Economic Action Plan’s home purchase and renovation incentives and CMHC’s recent outreach campaign to help Canadians who may be facing difficulties with their mortgage payment, are clear actions to support homeowners and the housing market,” said the honourable Diane Finley, minister of human resources and skills development Canada and minister responsible for CMHC.

CMHC surveyed more than 2,500 recent mortgage consumers online from mid-March to mid-April 2009 and was the largest sampling of recent mortgage consumers ever undertaken by CMHC.