A new report suggests that young, first-time buyers are taking on large mortgages in Canada’s most expensive cities due to FOMO – fear of missing out. The study for the CD Howe Institute was undertaken by economists Paul Jacobson and Craig Alexander. They found that household debt which has been driven by larger mortgages is generally well-managed but that there is concern that millennials are stretching their household budgets fearing that if they don’t buy a home now, they will never afford to. Mr Alexander calls for measures such as higher minimum downpayments for mortgage insurance and tougher ‘stress tests’ for borrowers’ budgets.
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