Borrowing costs

Mortgage data points to an advantage for buyers as borrowing costs rise

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The Canadian market could tilt in favor of buyers after spending much of the past two years favoring sellers, according to a recent report analyzing borrowing data.

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Nesto, a national online marketplace for mortgages, recently released research looking at customer data from September, revealing that the median purchase price of a home fell from $35,000 to $440,000. in Canada from July to August.

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At the same time, the median down payment rose from $63,000 in July to $43,500 in August.

The data also showed that the median down payment as a percentage of the purchase price fell from 13% in July to 10% in August. Additionally, the metric for August was half that of last April, when the average down payment was 20% of the purchase price.

The average down payment in Canada in April was also much higher at $70,000, while the average purchase price among borrowers exceeded $500,000.

Figures for Alberta show a similar trend. Nesto’s analysis shows the median purchase price for the province in August was around $425,000. That’s down from $452,000 in July. At the same time, the median down payment fell from $60,000 in July to around $37,000 in August.

Notably, the median down payment as a percentage of the purchase price fell from 20% in July to 10% in August.

The report concludes by suggesting that the data reveals that the market may now favor buyers as demand falls from its pandemic highs due to rising interest rates.