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Barriers to Homeownership Affecting Young Canadians’ Future Plans

In recent years, Canadians have encountered several financial challenges, from rising inflation to escalating interest rates, which have raised concerns about their future prospects and their ability to progress financially.

A Wednesday report by Statistics Canada highlighted the growing divide in wealth and debt among Canadian households, particularly affecting those under 35. This demographic is feeling squeezed by their existing debts and the struggle to find financial stability.

Statistics Canada has warned about the declining trend towards homeownership among younger Canadians, suggesting it could hinder their efforts to enhance their financial standing and wealth. This decline poses further risks to social and economic mobility due to persistent obstacles.

Carter McCormack, an economic analyst at Statistics Canada, pointed out that affordability in the housing market is hindered by various factors, including the initial down payment costs, debt servicing capabilities, interest rates, and the capacity to save.

McCormack also highlighted that the report shows a decrease in net savings across most income brackets, with those earning lower incomes resorting to “dissaving.” This means they are not saving but are instead using their existing savings to manage rising living costs, including groceries, rent, and other inflation-induced expenses.

Soberman expressed optimism that challenges like inflation and high interest rates will be temporary. However, he emphasized the necessity for governmental intervention to fully stabilize inflation and enhance the housing market, enabling Canadians to avoid financial strain in their pursuit of progress.

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