Daryl Fairweather:
Young buyers are often borrowing a substantial amount in order to afford their home, whereas existing homeowners, they are usually selling their homes. They get some proceeds from that they can put towards their next home. So they aren’t taking on as big of mortgages as potentially first-time homebuyers are.
So that mortgage rate increase is hitting first-time homebuyers a lot harder than it is existing homebuyers. And that’s why we’re seeing a lot of first-time homebuyers just decide to keep renting. The rental market has been pretty stable over the last couple of months. It’s starting to heat up a little bit, which may be a sign of more rent increases to come.
But for the time being, if you’re comparing, say, a one-bedroom apartment to a one -bedroom condo, it’s going to be more affordable in the short run to rent that apartment than it will be to buy it.
