Aging out

How old when you first bought real estate?

Dorothy and I married at 22, moved into a dodgy rented walk-up with one window 36 inches from  elevated train tracks running past the building and a bathroom so weensy you could potty, wash your hands and bathe a foot or two at the same time. We had almost nothing. So when we were robbed, it was of our only two possessions, She had pearl ring, and I a leather jacket. The cop shrugged.

Still, you can be young and poor and happy. Just don’t try it later.

Well, three years after that we’d finished uni, started a business with a borrowed $40,000 and managed to qualify for enough financing (sixty grand) to build a little place on rural dirt. The mortgage rate was just over 12%. We felt rich. When we had to sell a few years later for jobs in the city the economy was in deep recession. So we sold at a loss. It took years to recover.

It’s never been a slam-dunk to get a home in this country. When prices are low, rates are high. When it’s easy to buy it’s hell to sell. Today, of course, the wailing and moaning from young would-be buyers is intense. Governments have acceded to the reality of a ‘housing crisis’ and mortgage rates have fluctuated widely as prices sawtoothed their way skyward.

Never before have there been such incentives. Ultra-low downpayments. Thirty-year mortgage amortizations. Buyer tax breaks. Mortgage insurance on hefty priced places. The generous tax gifts of the FHSA and the Home Buyer’s Plan. Billions and billions spent to hurry up construction, finance builders and trash local zoning restrictions.

But is any of it working?

Prices now are 15% or 20% below 2022 levels, while inventory has erupted giving buyers huge choice while lenders are fighting for business with 3% loans. Yet sales are dropping. The backlog of unsold new homes is massive. And the threat of tariffs and recession seems to be freezing the critical spring market.

So have we hit the time when real estate is no longer for the young? Too financially debilitating?

Maybe. The evidence from the US (better data than Canada) is telling us times sure have changed.

In 1981 the average homebuyer was 31. Forty years later, in 2021, the average had risen to 45. And last year it hit an historic high – 56 years old.

And how about the average age of first-time purchasers?

Also leaping higher. Now it’s 38. Didn’t that used to be, like, “middle aged”?

So what do we know about Canadian house-buying demographics?

Says Google and that weird AI thingy: “In the 1970s and 1980s, the average age of first-time home buyers was 29 years old.  In 2021, the average age of first-time home buyers was 33 years old. In 2023, 24% of first-time home buyers were under 30, 33% were 30–34, and 43% were 35 or older.”

It looks like we’re not far behind the Yanks.

What to do if you are houseless and filled with FOMO and fear of the future at the same time?

Wait. Once the dregs of this spring market have slithered by, we’ll probably be in a real estate drought. Assuming the tariffs materialize, the media will be full of woeful tales of layoffs, higher grocery prices and hard times. We may have a new federal government, maybe not. If the Cons come in and start to defund stuff, cutting spending and being Trumpian, things will be somewhat harder. The Libs will probably do a minor rerun of pandemic support, in contrast, using debt. Meanwhile it’s reasonable to expect fewer house sales, more anxious sellers and a slow erosion in prices.

Already it is a buyer’s market. That could be extreme by the summer. Unknown at this point is how retaliatory tariffs will hurt, or the Bank of Canada respond. Lower rates would counter recession and layoffs. Higher rates would be aimed at tempering inflation. At this point the needle is pointing more down than up.

In short, by July you could see cheaper money, cheaper houses, lots of choice and needy sellers. Of course, you might also not have an employer. Gulp.

Just remember what I learned. Recessions suck. Then they pass. Always. And you’re not getting any younger.

About the picture: “May I introduce you to Her Highness?” writes Ward. “This is Ellie, a Collingwood, Ont. mutt, who is a delight to be around!”

To be in touch or send a picture of your beast, email to ‘[email protected]’.

Source: https://www.greaterfool.ca/2025/02/25/aging-out/