With mortgage deferral periods ending, current indications are “quite encouraging” that most homeowners will be able to make their payments, says a recent report by Mortgage Professionals Canada.

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“Earlier fears (and some dire economic forecasts) now appear to be much less probable,” says report author Will Dunning. “Available data shows that there is now only a very small minority of mortgages still in deferral (in the area of two per cent) and among borrowers for whom deferral periods have ended a very large majority (just under 100 per cent) are now making the required payments.”

But Dunning says that because of the unpredictability about the course of COVID-19 and the economic consequences, “This leaves us highly uncertain about how many Canadians will have difficulty making their future mortgage payments. Our survey data indicates that a substantial majority of mortgage holders (72 per cent in the fourth wave) expect that as a result of COVID-19 they will have “no difficulty” making their payments and a further 23 per cent expect “some difficulty.” Five per cent expected a higher degree of difficulty.

“We are facing an economic risk, as has been reported by numerous economists and crown agencies, that at the end of mortgage deferrals there could be large numbers of Canadians unable to meet their mortgage obligations, forcing them to sell their homes,” says Paul Taylor, president and CEO of MPC. “This may result in a rapid increase of homes available for sale, which causes prices to fall, which in turn impairs the economy. Fortunately, the number of Canadians expected to need continuing support following the expiry of the deferrals appears to be significantly lower than originally anticipated, which our survey respondents reinforce.”

The fourth installment of Rapidly Evolving Expectations in the Housing Industry surveyed almost 1,000 Canadians, comprising a wide sample of homeowners with mortgages, renters and others, including people who live with their parents.

As with other surveys in this series, a large majority of respondents said they believe homeownership is a good investment. Those who do not currently own a home are hoping they will be able to purchase one.

“I am most struck by the huge rise in aspirations about home ownership, although we don’t know how many of these aspiring homeowners will be able to accomplish their new goals,” says Dunning. “The strength of sales data so far implies that ‘all of this’ has caused a lot of us to give a lot of thought to how we live our lives, and in what arrangements.”

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