Numbers show it’s harder for millennials to buy a home than it was for their parents

WINNIPEG — Graduating school, landing a job and buying a house used to be a natural progression, but for the millennial generation, it’s not quite as easy.

Laura-Lynne Hildebrand is currently on the house hunt with her husband in Winnipeg.

“It’s something we’re prioritizing, but I can understand why a lot of millennials aren’t buying houses,” Hildebrand said. “Just given all the costs associated with it.”

Hildebrand said she is fortunate she’s getting some help from her family, but at age 24 she is one of only a few people she knows ready to purchase a home. She said they have to be selective about which neighbourhoods they live in to stay within budget.

“Do we need to spend a bit more than we planned? Can we afford to do that? We have to make those decisions. It’s stressful,” she said.

Tweet This Click to share quote on Twitter: "Do we need to spend a bit more than we planned? Can we afford to do that? We have to make those decisions. It's stressful," she said.

Winnipeggers Amy Giesbrecht and her husband also have been searching for a home for the last five years.

RELATED: Prices of Winnipeg homes going up, still among lowest in the country

“It is somewhat more difficult than we thought,” Giesbrecht said.  “Desirable neighbourhoods that are safe for families tend to create bidding wars or the houses are simply at a higher price tag than we could afford.”

And without help from her parents, Giesbrecht said it’s difficult to save after getting post-secondary education.

“Unless you are lucky enough to have university or college paid for, good careers come with thousands of dollars debt in student loans. Banks see that and are often hesitant to give mortgages,” she said.

“Our buying power is so much less than our parents was.”

Tweet This Click to share quote on Twitter: "Our buying power is so much less than our parents was."

More difficult to buy a home?

To find out if it’s harder for millennials to buy a home than it was for their parents, Global News gathered numbers from 1992, 2007 and 2016. Here are the results:

View image in full screen

According to financial consultant at Investors Group, Glen Melnyk, if we broke down these numbers into total debt servicing (TDS) it would look like this:

• 1992: TDS 15.1 per cent
• 2007: TDS 19.7 per cent
• 2016: TDS 25 per cent

That means 25 years ago, 15.1 per cent of your available income went towards your mortgage, taxes and total household debt. Ten years ago that number jumped to just around 20 per cent. Last year 25 per cent of your income went towards your home and other monthly financial obligations.

RELATED: Canadian millennials believe they have it tougher than past generations: poll

“It looks like it was a little bit easier to buy a house 25 years ago. Based on house prices and even though interest rates were higher, house prices were lower,” Melnyk said.

While the numbers don’t lie, he’s also noticing that many of his millennial clients prioritize their finances different than the previous generation.

“Travelling is a lot more relevant to people, not being tied down to a certain geographical location. Maybe they want to live in Vancouver, Toronto Winnipeg, they want to float around, do different things,” Melnyk said.

“They think a house ties them down. There is a mindset there that is different from Gen X and Gen Y.”

Tweet This Click to share quote on Twitter: "They think a house ties them down. There is a mindset there that is different from Gen X and Gen Y."

WATCH: What can $300,000 get you when buying a home in Winnipeg

1:29 What can $300,000 get you when buying a home in Winnipeg

The shifting trends are also being noted by the real estate industry.

“The size of a home is not nearly the priority that it might’ve been for first time home buyers. It used to perhaps be the criteria,” Rick Jansen, a real estate agent working in Winnipeg said. “Now they’re looking at other things. Features inside the home.”

Jansen also believes a technology driven generation has also made millennials a little less patient. He said some of the younger buyers come in wanting their dream home immediately. But he also agrees the prices don’t help.

RELATED: First time home buyers could be impacted by mortgage lending changes

“There’s no hiding the fact that home prices have gone up. And it seems almost every year we are setting new high water mark,” Jansen said.

A high water mark that’s pricing first time millennial buyers out of the market. Forcing them to spend 25 per cent of their monthly income on household debt compared to 15 per cent for their parents a generation ago.

“If you look at all of the statistics, the millennials are the first generation that are worse off than their parents,” Rob Warren, economics expert said.

Tweet This Click to share quote on Twitter: "If you look at all of the statistics, the millennials are the first generation that are worse off than their parents," Rob Warren, economics expert said.

“In terms of finding employment, the payment they’re getting and the costs they’re having to face don’t match up. So it’s not a millennial slacking issue which we’re so used to talking about.”