Be creative when saving to buy a home

Homeownership is a goal for most of us and millennials appear to be the most optimistic group. According to an RBC poll, two in five millennials said they intend to buy a home in the next two years. But the cost of homeownership and things such as regulatory changes can make saving for a downpayment more difficult and for many put the dream of homeownership out of reach.
However, first-time buyers may not be looking at all their options. A little flexibility and compromise can help make ownership more accessible when considering the following:
Begin with a starter home: Think about your lifestyle for the next five to 10 years and make a decision based on that. Your dream home in your dream neighbourhood may still be yours, just a bit later in your life.
Get a renter: Could you afford the home you want if you rented out part of it? Many people create a basement suite or rent out a second bedroom as a way to offset their mortgage payments.
Consider co-ownership: Buying a property with family or friends is a great way to get your foot in the door. Discuss options with your mortgage specialist and be sure to establish a solid contractual agreement that will help avoid or mediate any future disagreements when selling the property, renegotiating terms or buying each other out.
Be patient: Style your home slowly. Get creative with chic but less expensive, gently used furniture or pieces that may not last a lifetime but will save you money today. Calgary Sun Feb 24, 2018

Homeowners are going on ‘spending binges’ – study

  Here's a great article by my associate Michael Mata .

Homeowners in Canada’s hottest housing markets are taking advantage of rising property values to go on spending binges, according to National Bank of Canada, the nation’s sixth largest bank.
“The sharp appreciation in home prices in Ontario and British Columbia, fueled by extremely accommodative monetary policy, have undoubtedly encouraged some homeowners to tap into their home equity in order to support a spending binge,” said Stéfane Marion, chief economist and strategist at National Bank of Canada.
In Canada, there are currently about three million active home equity lines of credit (HELOCs), according to National Bank, citing data from the Financial Consumer Agency of Canada.
On average, the outstanding balance on Canadian HELOCs is $70,000, and these types of loans account for about 45% of consumer credit.
Rather worryingly, there has been an increase in this type of consumer debt. “We estimate that HELOCs at Canadian chartered banks have surged by close to $20 billion in the past year, accounting for close to 60 per cent of the growth in total consumer credit,” Marion said.
Households taking advantage of HELOCs are fueling a broader borrowing frenzy, said National Bank. During the last quarter, consumer credit grew at its fastest rate since 2010.
While National Bank doesn’t examine what Canadians are spending their HELOCs on, earlier this year, one Toronto-based mortgage agent told BuzzBuzzNews that homeowners are increasingly using their HELOCs to help their children finance their own home purchases.
Overall, the racking up of consumer debt is extremely risky, National Bank warned. While it supports near-term GDP growth, increased debt, including HELOC debt, poses risks to the financial system’s stability and undermines the financial well-being of individuals.
“So, the resurgence in consumer credit may ring some alarm bells at the Bank of Canada which, as you may recall, continues to see household indebtedness and housing market imbalances as ‘the most important vulnerabilities for the Canadian financial system,’” Marion said.  

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Calgary home sales jump from record lows

Home sales in the Calgary market have jumped from their record lows of a year ago but remain well below the longer-term average.

Calgary Real Estate Board says that sales for January totaled 924 units, up 24 per cent from a year earlier but 21 per cent below the 10-year averages for the month.

"Conditions have improved over last year, but people need to remember that last year's market was one of the weakest on record,” said CREB chief economist Ann-Marie Lurie. “Despite the appearance of a major shift in activity, the transition in the housing market is going to be a slow process."

The improvement from a year earlier was driven by detached home sales which increased from 466 in January 2015 to 584 last month.

Inventory tightened to 4,112 units, 18 per cent lower than a year earlier and was equal to just 3.2 months of supply. This has helped price decreases ease and although the city-wide benchmark was down 2.82 per cent year-over-year to $437,400, the month-over-month decline was 0.16 per cent.

"While housing conditions continue to favour buyers, a slow transition toward more balanced conditions is helping to ease downward pressure on home prices," Lurie added.

CREB president David P. Brown says that the recent history shows that the market never stands still.

"The market isn't expected to be as unpredictable in 2017, but it's early in the year and there are still lots of unknowns that will shape decision-making for consumers," Brown said.

This article was first published in Mortgage Brokernews. For more information contact David Cooke, your Calgary mortgage broker .