Over the past year, we’ve heard that younger households were behind the real estate binge. In addition to transfer data showing that’s not true, Equifax mortgage data for Q3 2021 agrees. Most demographics showed little change in their borrowing patterns, except for the extremes. Millennial-led households maintained their share of mortgages, but a larger share of debt. Senior-led households increased their share of mortgages, but held a smaller share of debt.
Millennials Captured A Greater Share of Debt, But Not Mortgages
The explosion of young homebuyers across Canada? More myth than reality. Households led by people between the ages of 25 and 34 held 15% of outstanding mortgages in Q3 2021. That’s the number of mortgage accounts, not the dollar balance. The share has been unchanged for the third quarter going back to at least 2018. The volume in homes purchased scaled with the market.
These households are holding onto a larger share of mortgage debt than prior years. In Q3 2021, these households owed 17% of outstanding mortgage credit in dollar terms. It’s up 1 point from the year prior, but a similar level to pre-pandemic.
Canadian Average Q3 Mortgage Payments
The average monthly mortgage payment for existing homeowners, compared to the mortgage payment an average home buyer in the quarter needs to pay.
Source: Equifax; CMHC; Better Dwelling.
Between Millennials and Gen X Hasn’t Seen Much Change
Canadian homeowners between 35 and 44 years old, held a stable share of the market. In Q3 2021, they represented 26% of mortgage borrowers, which is the rate going back to 2018. They also owe a consistent 30% of outstanding mortgage dollars over the same period as well. Current trends have little impact on their buying behavior, it appears.
Gen X Homeowners Have Seen Their Market Share Shrink
Households between 45 to 54 years old, are a smaller share of the mortgage market than pre-2020. In Q3 2021, they were 25% of mortgages, unchanged from a year before. The share was 26% in Q3 2019, though. A slight decline for the largest group of mortgage holders in Canada.
Their share of outstanding mortgage balances has declined with mortgages as well. In Q3 2021, these borrowers owed 26% of outstanding mortgage debt in dollar terms. It’s down from 27% a year before, a consistent share going back to at least 2018. The decline is in-line with their drop in market share.
Canadians Between 55 and 64 Saw Their Share of Mortgages Fall
Households between 55 and 64 saw a slight boost in the share of mortgages they held, but it’s fallen back down. In Q3 2021, they represented 20% of mortgages outstanding, down a point from a year before. It’s the same level seen in 2019 and 2018, though. Last year appears to have just been a temporary boost.
The temporary boost also had a similar impact on outstanding mortgage debt. In Q3 2021, they owed 17% of outstanding mortgage debt, down a point from a year before. It was similar to the decline in mortgages, which makes sense. The share is also the same as pre-pandemic.
Boomers Are The Only Group To Increase Their Share of Mortgages
Canadians aged 65 and up are the only demographic to capture a larger share of mortgages in recent years. In Q3 2021, they represent 12% of mortgages, unchanged from the previous year. It’s up 1 point from 2018, though, which is the only age group to see an increase in the share of outstanding mortgages.
There was an increase in the share of mortgages, but not the outstanding balance. In Q3 2021, this group owed 8% of outstanding mortgage credit, down a point from a year before. It’s the same share seen in the third quarter of 2019 and 2018, respectively.
Canada’s mortgage borrowers demographics showed little change for most groups. The middle of the age groups were mostly unchanged, scaling with the market. Younger families have maintained their share of the market, but at a cost of more and more debt. Older households have managed to capture a greater share of the mortgage market.
The shift might seem a little odd, but marks change in how older Canadians have viewed real estate recently. In our interview with veteran mortgage broker Ron Butler a few weeks ago, he stated he’s observing more “accumulation.” That is, households aren’t just paying off their mortgages, but adding more mortgages to their holdings. Most people have trouble walking away from the table after winning a jackpot, and try their luck at double or nothing.