Young homebuyers spend more than planned, need help from family
By Diana McLaren • Bankrate.com

Home may be where the heart is, but for young buyers today, it's a brave new world of high prices and bidding wars their parents didn't have to face.

A new TD Canada Trust survey compares the attitudes of young homebuyers 18 to 34 with those of the 55-plus generation at the time they bought their first house. It reveals that younger buyers feel more financially ready, spent more than they'd planned and needed more help from family than older homebuyers reported.

"The finding that they feel more financially ready when they make their first home purchase indicates the ease and access to information they have," says Chris Wisniewski, group manager of real estate secured lending for TD Canada Trust. "Also, perhaps, the fact that it's a lot easier to put together a down payment today as opposed to the older generation who had to put down much higher percentage down payments."

Mortgage pay down not a priority for young buyers
The survey, entitled the Generational Homeownership Study, found that:

• Fifity-one percent of younger Canadians said they felt financially ready to buy a house compared to 37 percent of older Canadians 55-plus.
• Thirty-six percent of Canadians 18 to 34 needed financial help from family versus only 16 percent of those 55-plus.
• Less than half (49 percent) of younger Canadians agree paying off their mortgage is a first priority compared to 64 percent of older homebuyers.

Dan Corbett, 31, and his wife, Jennifer, recently purchased their first house following the birth of their daughter last year. They don't fit easily into the generational snapshot portrayed in the TD Canada Trust survey.

"We didn't feel financially ready," Corbett says, "but our families talked to us about the good interest rates now and showed us how we could afford a house with what we were then paying in rent."

The Corbetts did mirror the survey's finding in terms of needing financial help. In fact, "our families gave us the down payment," says Dan. And because they bucked the trend of buying above the amount they'd set by purchasing a house well within their means, the family contribution amounted to a hefty 25 percent down payment.

Keeping within limits is hard
Staying within their limit is something 30-year-old Darren Smith and his partner are determined to do as they begin the process of saving and planning for their first home purchase.

"Every single person I know who's bought a house paid way more than they'd expected and felt they could afford," he says. He cites bidding wars as the reason.