Affordability issues are ‘casting a shadow’ over young Canadians’ economic futures
Canadians are at risk of missing key financial milestones, particularly achieving the dream of homeownership — amid what Statistics Canada sees as a series of affordability challenges staring down the youngest generations.
“Barriers to important life cycle milestones and transitions have intensified in Canada,” the agency said in a report released Wednesday.
“Sustained food inflation, elevated housing prices, and increasingly unaffordable rental costs across much of the country are casting a shadow over the homeownership dream for many households — and, in particular, for young families.”
Young Canadian households (where the primary earner is under 35 years old) were the only cohort to see their mortgage burden decrease year-over-year in the third quarter of 2023, according to StatCan. That could be because young Canadians are paying their mortgage debt down faster, forgoing buying a home at all, or downgrading to more affordable accommodations.
The agency said that younger households are “starting to turn away from the housing market.”
StatCan pointed to rising costs for renters — many of whom are younger — amid persistent shelter inflation keeping homeownership out of reach. Renters were flagged as being more likely to face financial difficulties compared with homeowners, the agency said.
While young Canadians have seen their debt-to-income ratios improve over the past year as wages grow and the mortgage burden declines, StatCan said debt-servicing ratios for this cohort have “increased markedly” under the weight of higher interest rates.
Young households were spending 10 cents per dollar earned on debt last year, up from seven cents a dollar in 2022, StatCan said.
Renters are not the only ones facing challenges,
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