First Time Homebuyers Report 2013

Submitted By taniamack4
Words: 2314
Pages: 10
Open Document
First-Time Homebuyers Report
Tania McCormack
FNCE 2130 – 001
April 11, 2013

Introduction
In Canada an average first-time homebuyer is 29 years old, with the expectations that they will spend $300,000 on their new home and have a down payment of $48,000 (Nguyen, 2013, para. 1). However, the average price to be spent on a first home in Canada varies from province to province; the average price ranges from $202,000 in Atlantic Canada to $406,000 in Alberta (Nguyen, 2013, para 3). As a home is a significant investment there are numerous factors that need to be considered when purchasing; these factors include: the Canadian and Alberta housing market, saving for a down payment, and obtaining a mortgage.

Canadian Housing Market
According to the Canadian Mortgage and Housing Corporation (CMHC, 2013), the new housing starts for single family homes in Canada are expected to slight increase in the first half of 2013 and have a modest increase in the latter half of 2013 and throughout 2014 (p.2). However, it is expected that multi-family home starts will decrease in 2013 and have a moderate increase in 2014 (CMHC, 2013, p.2). The market in Canada for the resale of homes is expected to remain stable in 2013 and then rise with the economy in 2014; this is due to the current balance between buyers and sellers in the market (CMHC, 2013, p. 2). The pricing of resale houses in Canada is expected to grow at the inflation rate, or slightly below the inflation rate; this is also due to the balance of buyers and sellers in the market (CMHC, 2013, p.2). The average price forecasted for a resale home in Canada in 2013 is $367,500 and in 2014 the average price is forecasted to be $377,300 (a 2.7% increase from 2013) (CMHC, 2013, p. 22). This average price differs from what first time homers buyers are expecting to spend; in a recent survey it was noted they expect to spend $300,000 (Nguyen, 2013, para. 1). There is also expected to be a slight decrease in demand from first-time homebuyers due to the low population growth in the 25-34 year old age group (CMHC, 2013, p, 5). Based on the report from Canadian Mortgage and Housing Corporation it is forecasted that the housing market in Canada will remain relatively stable and prices will increase at the rate of inflation (CMHC, 2013, p.2).

Albertan Housing Market
The Albertan market for single-family dwelling new starts is forecasted to have a slight increase in 2013 and 2014 (CMHC, 2013, p.7). The number of single-family starts in 2012 was 17,492; in 2013 and 2014 it forecasted that single-family new starts will be 17,500 and 17,600, respectively (CMHC, 2013, p.7). The market in Alberta for new start multi-family dwellings is similar to the Canadian market; it is forecasted that number of new starts will decrease in 2013 compared to 2012; and in 2014 the number of new starts will have slight increase compared to 2013 (CMHC, 2013, p.7). The market for resale homes in Alberta is forecasted to have a slower growth rate in 2013 compared to 2012, (1.67% and 12%, respectively); the growth in 2014 is forecasted to be 2.3% (CMHC, 2013, p. 7). The average price in Alberta for a resale home is forecasted to be $371,200 in 2013 and $380,700 in 2014 (CMHC, 2013, p. 7). This differs from what first time homebuyers are planning on spending on homes; in a recent survey it was noted that Alberta first time homebuyers are planning on spending $406,000 (Nguyen, 2013, para 3). In Calgary the average price of a resale home is forecasted to be $422,000 in 2013, and the average price for a new start single-family home is forecasted to be $583,000 in 2013 (CMHC, 2012, p. 7).

Saving for a Down Payment
For a first time homebuyer at least 5% of the purchase price of the home is needed to obtain a mortgage (Bank of Montreal [BMO], n.d., Down Payment for a Home, para. 2). As the average first time homebuyer in Alberta is expecting to pay $406,000 for their home, a down payment of $20,300 would be needed
Show More

Related Documents: First Time Homebuyers Report 2013

Essay about First Time Homebuyers

First Time Homebuyers LAS-30012 Ms. James-Etta Goodloe 5/23/13 Abstract There is always the common question what does it take to get a first time home buyers loan? And the answer is there is so much that goes into the process of getting a home loan. You have to find out if there is a down payment and what percentage the seller wants for a down payment. Is the seller going to pay the closing costs or does that come out of your pocket? All these questions and more are what go into getting…

Words 992 - Pages 4

Resner Article Essay example

requirement that homebuyers make significant down payments was eliminated in the 1990’s. The NPH urged and approved increasingly larger reductions in requirements. In 1989 only 7 percent of home mortgages were made with less than 10 percent down payment. By August 1994, low down payment mortgage loans had increased to 29 percent”. This trend continued unabated throughout the 1990’s so by 1999, over 50 % of mortgages had down payments of less than 10%. In 1976 the average down payment by first time homebuyers…

Words 917 - Pages 4

Seagoville Home Case Study

participating in HLCC’s credit repair workshop, financial literacy seminar and the first time homebuyers program. After much financial planning and sacrifice, she was soon at the closing table, purchasing her forever home. “I began the process in January starting with the credit repair workshop. After the workshop, I called Angie, my assigned counselor. I saw Angie every month beginning in February,” said Kenya Littlejohn. “At first, I tried to delay…

Words 395 - Pages 2

Mortgage Options Analysis Essay

$22,652.55 Thus, by choosing Option 2 a homebuyer saves $2,821.85. B. If you plan to live in the house for only five years, how does this affect your choice? Discuss in detail. Based on my calculations and if a person intends to live in the house for only 5 years, Option 1 would be a better choice for a homebuyer. The total savings for Option 1 would be $13,412.51, while savings for Option 2 would be $11,978.70 . Thus, by choosing Option 1 a homebuyer saves $1,433.80. C. Suppose that you…

Words 1138 - Pages 5

Time Zone and Current Local Time Essay

Current local time in Canada – Ontario – Toronto - Time and Date www.timeanddate.com/worldclock/city.html?n=250‎ Find out current local time in Toronto – Ontario – Canada. Get Toronto's weather and area codes, time zone and DST. Explore Toronto's sunrise and sunset, ... Time changes in year 2013 for ... When to change the clock in Canada – Ontario – Toronto in ... The World Clock - Time Zone ... The World Clock - Time Zone difference from Canada ... More results from timeanddate.com » Toronto…

Words 318 - Pages 2

House Prices In The UK Essay example

are low, more people may try to qualify for mortgages. Also, improvements in the UK economy will mean more homebuyers as the unemployment rate will decrease and therefore people will feel more confident and may be choose to buy a house. Lower interest rates combined with greater numbers of people with jobs can convince lenders to give more mortgage loans, increasing the number of homebuyers increasing demand and therefore price. Home owners in the UK make about 70% of the population. In this sense…

Words 986 - Pages 4

Home Buying Myths

the home buying process by looking for a house – Many people believe the first thing you need to do is find a house you want to buy. In reality you need to speak with a mortgage lender to find out how much money you can be approved for and how much house you can afford. 2. A traditional 30 year fixed rate mortgage is your best option – There are many times when this type of mortgage is ideal, but there are also many times when another loan option would be a better fit. Adjustable rate mortgages…

Words 546 - Pages 3

Individual Taxation Essay

In this paper, I will analyze the use of tax credits within the U.S. tax system. I will evaluate the fairness of the tax credits to all individual taxpayers, determining the impact that the tax credits cause to taxpayers who qualify for the credits and those who do not qualify, indicating how any unfairness can be rectified. In addition, I will propose a remedy that the IRS might adopt to prevent or end the abuse and recommend an alternative to tax credits that will meet the needs of all individual…

Words 2786 - Pages 12

Current Ethical Issues Article Search

Services offers conventional FHA, and VA loans for home purchasing and refinancing. Their mission is to become the leading provider of low cost mortgage services by using state of the art technology. McBride Financial Services specializes in first time homebuyers as well as problem credit clients. Upon approved credit the customers will receive a credit report, mortgage, inspection, and appraisal. By using technology to minimize cost and increase efficiency, these services are offered for a fixed price…

Words 824 - Pages 4

Retirement Homework Chapter 9 Essay

are: Qualified Domestic Relations Order (QDRO), attainment of age 55 and separation from service, public safety employee who separates from service after age 50, dividend pass through from ESOP Exceptions only to IRAs: higher education expenses, first time home purchase up to $10,000, payment of health insurance premiums by unemployed 13) Roth IRAs are very attractive because, although the contributions to a Roth IRA are not deductible, qualified distributions (defined below) from Roth IRA accounts…

Words 1014 - Pages 5