FIND AN EXPERT
Let us connect you with
the right broker for you.

Contact Us

FIND AN EXPERT
Drop your contact info below, and we'll be in touch. 

Contact Us

The great debate: Gen-X Vs. Millennial

Jackson Middleton • Jan 06, 2020

When it comes to buying a home, who has/had it worse?

If you’ve ever been around a Gen-Xer and Millennial together, you’ve probably heard this debate before: Who had it easier trying to get into the housing market?

Undoubtedly, the millennial will claim there is no struggle greater than the one they currently face, while the Gen-Xer will tell their younger cohort that they are spoiled and don’t understand how hard it was to adult in the 90s.

So, are millennials better or worse off than Gen-Xers at the same age?

A report earlier this year from Stats Canada set out to settle the debate with some interesting findings.

For starters, the study found on average young millennials earned more than young Gen-Xers. Specifically, Gen-Xers between the age of 25 and 34 in 1999 earned on average $51,000 annually compared to millennials who earned $66,500 in 2016.

The study found that millennials in 2016 also had higher assets and net worth then their grunge-era counterparts in 1999 at $154,000 to just $76,700 respectively.

However, millennials were found to be more indebted, with a debt-to-after-tax-ratio at 216 per cent compared to 125 per cent for Gen-Xers.

The study also found millennials are taking on larger mortgages then previous generations. The median mortgage debt on the principal

residences of a millennial between the ages of 30 and 34 in 2016 was $218,000 compared to $117,500 for Gen-Xers in 1999.

Interestingly, though their median net worth is higher, there are greater differences in economic well-being among millennials, specifically, millennials in the top 10 per cent held 55 per cent of all total net worth accumulated by their generation.

The study also found that millennials are entering the housing market at similar rates as previous young generations.

So, who can claim the biggest hardship to getting into market? That would depend on how you want to spin the facts. Instead, maybe the key is in the finding that millennials are getting into the market at the same level as their parents and grandparents did before them.

Of course, there have been a number of market factors and challenges each generation has had to face. Consider late boomers trying to get into the housing market with interest rates at nearly 20 per cent in the early 80s, or the recession and economic malaise of the 1990s.

At the end of the day, and this study proves it, young people in every generation have found a way to look past the challenges in their face, and fulfill the dream of homeownership. And if you’re a young person ready to buy or soon to be, any of our Canadian Mortgage Experts would be happy to help get you there.


RECENT POSTS 

RRSP As A Downpayment

By DLC Canadian Mortgage Experts • 28 Dec, 2022
Did you know there’s a program that allows you to use your RRSP to help come up with your downpayment to buy a home? It’s called the Home Buyer’s Plan (or HBP for short), and it’s made possible by the government of Canada. While the program is pretty straightforward, there are a few things you need to know. Your first home (with some exceptions) To qualify, you need to be buying your first home. However, when you look into the fine print, you find that technically, you must not have owned a home in the last four years or have lived in a house that your spouse owned in the previous four years. Another exception is for those with a disability or those helping someone with a disability. In this case, you can withdraw from an RRSP for a home purchase at any time. You have to pay back the RRSP You have 15 years to pay back the RRSP, and you start the second year after the withdrawal. While you won’t pay any tax on this particular withdrawal, it does come with some conditions. You’ll have to pay back the total amount you withdrew over 15 years. The CRA will send you an HBP Statement of Account every year to advise how much you owe the RRSP that year. Your repayments will not count as contributions as you’ve already received the tax break from those funds. Access to funds The funds you withdraw from the RRSP must have been there for at least 90 days. You can still technically withdraw the money from your RRSP and use it for your down-payment, but it won’t be tax-deductible and won’t be part of the HBP. You can access up to $35,000 individually or $70,00 per couple through the HBP. Please connect anytime if you’d like to know more about the HBP and how it could work for you as you plan your downpayment. It would be a pleasure to work with you.

Is There A Difference Between A Deposit And Downpayment

By DLC Canadian Mortgage Experts • 21 Dec, 2022
If you’re new to the home buying process, it’s easy to get confused by some of the terms used. The purpose of this article is to clear up any confusion between the deposit and downpayment. What is a deposit? The deposit is the money included with a purchase contract as a sign of good faith when you offer to purchase a property. It’s the “consideration” that helps make up the contract and binds you to the agreement. Typically, you include a certified cheque or a bank draft that your real estate brokerage holds while negotiations are finalized when you offer to purchase a property. If your offer is accepted, your deposit is held in your Realtor’s trust account. If your offer is accepted and you commit to buying the property, your deposit is transferred to the lawyer’s trust account and included in your downpayment. If you aren’t able to reach an agreement, the deposit is refunded to you. However, if you commit to buying the property and don’t complete the transaction, your deposit could be forfeit to the seller. Your deposit goes ahead of the downpayment but makes up part of the downpayment. The amount you put forward as a deposit when negotiating the terms of a purchase contract is arbitrary, meaning there is no predefined or standard amount. Instead, it’s best to discuss this with your real estate professional as your deposit can be a negotiating factor in and of itself. A larger deposit may give you a better chance of having your offer accepted in a competitive situation. It also puts you on the hook for more if something changes down the line and you cannot complete the purchase. What is a downpayment? Your downpayment refers to the initial payment you make when buying a property through mortgage financing. In Canada, the minimum downpayment amount is 5%, as lenders can only lend up to 95% of the property’s value. Securing mortgage financing with anything less than 20% down is only made possible through mortgage default insurance. You can source your downpayment from your resources, the sale of a property, an RRSP, a gift from a family member, or borrowed funds. Example scenario Let’s say that you are looking to purchase a property worth $400k. You’re planning on making a downpayment of 10% or $40k. When you make the initial offer to buy the property, you put forward $10k as a deposit your real estate brokerage holds in their trust account. If everything checks out with the home inspection and you’re satisfied with financing, you can remove all conditions. Your $10k deposit is transferred to the lawyer’s trust account, where will add the remaining $30k for the downpayment. With your $40k downpayment made, once you sign the mortgage documents and cover the legal and closing costs, the lender will forward the remaining 90% in the form of a mortgage registered to your title, and you have officially purchased the property! If you have any questions about the difference between the deposit and the downpayment or any other mortgage terms, please connect anytime. It would be a pleasure to work with you.
More Posts
Share by: