Majority of aspiring homeowners awaiting rate cuts before buying: BMO survey

April 29, 2024 at 12:24PM EDT

Canadian economic data aligns with potential June rate cut: CIO Lesley Marks, chief investment officer at Mackenzie Investments, tells BNN Bloomberg that Canadian retail sales, which edged lower in February and are estimated flat for March, point to quite substantial declines in consumer discretionary spending and show that Canadians have been hit hard by higher interest rates. She says weakness in the economy does not necessarily translate to weakness for the TSX, and discusses sectors that have performed well for investors.

The majority of Canadians aspiring to buy a home say they will push their plans to next year or later to wait for interest rates to drop, a new survey shows.

Bank of Montreal says 72 per cent of respondents hoping to buy a home will wait until borrowing costs fall — an increase of four per cent compared with last year.

While interest rate cuts are expected in the second half of the year, BMO Capital Markets senior economist Robert Kavcic says it is still a long way for rates to be low enough to restore affordability to recent norms.

The survey, conducted by Ipsos from Feb. 28 to March 18, shows 85 per cent of respondents say they're making real financial progress toward buying their first home but face financial anxiety.

Among the top concerns are unexpected expenses, climate considerations such as wildfires and the high costs of homeownership.

BMO's Hassan Pirnia says despite the economic and market challenges, many young Canadians are preparing to embark on their homebuying journey and enter the real estate market for the first time.

This report by The Canadian Press was first published April 29, 2024.