Latest news with #BMORealFinancialProgressIndex
Cision Canada
3 days ago
- Business
- Cision Canada
BMO Survey: Personal Finance Concerns Rose Significantly Between March to April 2025 Français
Survey shows concerns about inflation and their own financial situations increased by 16 points. TORONTO, June 4, 2025 /CNW/ - A special report from the BMO Real Financial Progress Index reveals Canadians' concerns about their personal finances have surged amid increased economic uncertainty and market volatility. The survey explored changes in Canadians' concerns about their finances and current economic conditions between March and April 2025, and found: Cost of Living Considerations: 78% reported growing concerns about the cost of living in April – a 17-point increase from 61% in March. Inflation Concerns Intensify Over three quarters (76%) say their concerns about inflation have increased – a 16-point increase from 60%. Temperature on Tariffs: Concerns about the impact of US tariffs increased from 65% to 74%. Rising Recession Risks: Canadians' concerns about the prospect of economic recession increased from 60% to 74%. Pulse on Personal Finances: Nearly three in five (58%) say they are more concerned about their financial situation – a 16-point increase from the 42% in March. In addition, nearly one quarter (24%) reported in April they are increasingly concerned about the prospect of losing their job. "Canadian consumer confidence recently plummeted to the lowest depths in at least six decades on fear that the trade war will cost people their jobs and undermine their financial security. However, sentiment improved modestly in April amid a partial de-escalation of the trade war. A more recent recovery in equity markets should support confidence further in May," said Sal Guatieri, Senior Economist, BMO. "While BMO Economics is concerned about the economic impact of tariffs, we are less worried about the inflation outlook, as retaliatory tariffs on imports from the U.S. have been restrained. CPI inflation will likely hold close to the Bank of Canada's 2% target this year, paving the way for some further reductions in policy rates." "Many Canadians and their families are understandably more concerned about their finances and are taking proactive steps to protect their financial future," said Anthony (Tony) Tintinalli, Head, Specialized Sales, BMO. "At BMO, our team of experts are available to help Canadians build a personalized financial plan and adjust these plans as circumstances change or new goals emerge. With planning and a disciplined approach to spending, Canadians will be empowered to navigate the challenging environment, achieve their financial goals and make real financial progress with confidence." "While navigating markets has been difficult amid the recent uncertainty, we remain committed to well-balanced and well-diversified portfolios,' said Brent Joyce, Chief Investment Strategist, BMO Private Investment Council. "Uncertain times can also be a good time to reassess risk tolerance, but decisions should be made with a long outlook in mind. A trusted advisor can help people determine their best path forward." The BMO April survey also found Boomers are most concerned about the cost of living (84%), tariffs (83%), the prospect of an economic recession (82%) and inflation (80%), while Gen Z are the most concerned about the prospect of losing their jobs (37%). BMO Helps Canadians Make Real Financial Progress BMO offers tips and resources to help Canadians stay on track towards their financial goals and make real financial progress during times of uncertainty: Start Planning Early: Outlining short and long-term financial objectives and goals helps determine the appropriate investing and savings solutions to incorporate in a financial plan. Practice Discipline: Manage spending, review budgets, and include any automatic contributions through pre-authorized contributions to savings plans as an expense. Monitoring spending with a monthly budget will allow flexibility to suspend or decrease the spending amount in the continuous savings plan when needed or increase the amount when a budget allows for it. Build an Emergency Fund: Aim to save at least three to six months' worth of living expenses to help cover unexpected costs or loss of income. Diversify Investments: Spread investments across different asset classes, sectors and geographies to reduce risk. Stress Testing Strategies: Consider stress testing financial plans and investment strategies to help plan for economic, market and personal changes that can affect the progress towards financial goals such as saving for retirement, buying a home, etc. Keep Calm and Stay the Course: During periods of market volatility, avoid panic selling and maintain a long-term perspective on investments in order to benefit from the power of compound growth. Seek Professional Advice: Do not wait to seek help until a time of crisis. Working with a professional expert and meeting with them regularly can help Canadians and their loved ones create and maintain a financial plan that reflects their financial goals, sources of income and cash flow, risk appetite and time horizons, and adjust these plans new goals emerge or circumstances change. To learn more about how BMO can help customers make financial progress, visit Launched in February 2021, the BMO Real Financial Progress Index is an indicator of how consumers feel about their personal finances and whether they are making financial progress. The index aims to spark dialogue that will help consumers reach their financial goals and to humanize a topic that causes anxiety for many – money. The research detailed in this document was conducted by Ipsos in Canada from March 3 rd to 26 th, 2025. A sample of n=2,500 adults ages 18+ in Canada were collected. To account for recent changes in the economic situation, certain questions were asked again from April 17 th to 20 th, 2025 among a sample of n=2,001 adults ages 18+ in Canada. Quotas and weighting were used to ensure the composition of both samples reflects that of the Canadian population according to census parameters. The surveys have a credibility interval of +/- 2.7 per cent 19 times out of 20, of what the results would have been had all Canadian adults 18+ been surveyed. About BMO Financial Group BMO Financial Group is the seventh largest bank in North America by assets, with total assets of $1.4 trillion as of April 30, 2025. Serving customers for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to 13 million customers across Canada, the United States, and in select markets globally. Driven by a single purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and inclusive society.
Miami Herald
09-05-2025
- Business
- Miami Herald
Another pause in Fed interest rate cuts may disappoint homebuyers
When mortgage rates spiked from 3.5% to nearly 7% in 2022, the Covid-era housing boom was brought to an abrupt end. The sustained high rates have frozen the market, making homeownership pricier for buyers and discouraging sellers from listing properties. Many potential buyers have opted to delay buying a home until rates drop to a more palatable level, making the financial commitment more affordable. Don't miss the move: SIGN UP for TheStreet's FREE daily newsletter Though the federal funds rate isn't the main determinant of mortgage rates, it does influence borrowing costs, which factors into mortgage rates. Lower interest rates also improve consumer confidence, raising homebuyer confidence. The Fed has held interest rates at every meeting this year, and the central bank stuck to the same strategy at the May Board of Governors meeting yesterday. Homebuyers waiting for a boost in the housing market or a mortgage rate drop may have to wait for the next Fed meeting in June. The housing market has been stagnant for the past few years, as buyers and sellers wait for mortgage rates to drop. Although the federal funds rate doesn't directly shape mortgage rates, the 10-year treasury yield does, and it tends to drop in anticipation of a Fed interest rate cut. It was widely believed that the Fed would hold interest rates steady at their current level between 4.25% and 4.50% at the May board meeting. Still, younger homebuyers hoping for housing market relief may be disheartened - and will continue closely monitoring the Fed's movements for the remainder of the year. More on homebuying: The White House will take surprising approach to curb mortgage ratesHousing expert reveals surprising ways to reduce your mortgage rateDave Ramsey warns Americans on a homebuying mistake to avoidWarren Buffett's Berkshire Hathaway sounds the alarm on the 2025 housing market Up until October 2024, mortgage rates mirrored the federal funds rate, meaning that an interest rate cut would likely mean a mortgage rate drop. However, stubborn mortgage rates have been largely unaffected by the Fed's interest rate cuts last year, breaking with its historical tendencies and dampening homebuyer sentiment. There may be hope on the horizon for homebuyers in Q3. Though the Fed will likely hold rates again at the June meeting, CME FedWatch forecasts an 51.1% chance that the Fed will cut rates in July and make another potential rate cut in September. Younger homebuyers have faced a tumultuous housing market over the past five years. Constant fluctuations in mortgage rate, prices, and supply have made it difficult to find the right time to buy a home. Now, younger generations have become apprehensive about buying a home in these conditions. The BMO Real Financial Progress Index found that 69% of Gen Z renters and 74% of Millennial renters are waiting for mortgage rates to fall before buying a home. Related: Morgan Stanley predicts major mortgage rate changes are coming soon Mortgage rates and the general lack of affordability remain a top concern for younger homebuyers, prompting many to delay homeownership for years. The median first-time homebuyer age reached 38 last year, the highest on record. BMO Chief U.S. Economist explains that while housing market conditions aren't ideal, they could turn around soon, and financial preparedness will be key. "The financial hurdles to owning a home have rarely been higher, especially for young households that don't yet have their foot in the door," he said. "Poor housing affordability, limited inventory of existing homes, and rising interest rates make finding the right home that fits your budget a challenging endeavor." "The good news is economic and financial conditions can change quickly, so it makes sense to start planning today." Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Newsweek
08-05-2025
- Business
- Newsweek
Gen Z, Millennials Don't Want to Buy Starter Homes
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. A growing number of Gen Z and millennial renters are rejecting the traditional idea of buying a modest "starter home" as a first step in building wealth. Instead, many are holding out to purchase a more permanent residence that better suits their long-term needs, marking a generational shift in how younger Americans think about homeownership. A for sale sign in front of a home in Arlington, Virginia, on August 22, 2023. A for sale sign in front of a home in Arlington, Virginia, on August 22, 2023. ANDREW CABALLERO-REYNOLDS/AFP via Getty Images Why It Matters The move away from starter homes is reshaping demand in the real estate market. Builders who once targeted first-time buyers with lower-cost, smaller homes may now need to adjust their strategies. With affordability concerns and mortgage rates still high, more young adults are skipping that initial step entirely and waiting longer to buy homes that they plan to stay in. What to Know According to the BMO Real Financial Progress Index, 66 percent of Gen Z renters and 61 percent of Millennial renters agree that buying a starter home and upgrading later "makes no sense anymore." The data suggests that young adults no longer view homeownership as a multi-stage process, and they are skeptical of the financial value in purchasing a smaller home only to sell and move again in a few years. High home prices, low inventory, and elevated interest rates have made it difficult for younger generations to follow the traditional housing path. At the same time, many entry-level homes that once served as starter options have been bought by investors or priced out of reach. In places where starter homes are available, they may require major renovations or be located far from work and amenities. The survey found 69 percent of Gen Z renters and 74 percent of Millennial renters who intend to buy a house are waiting for interest rates to drop before making a purchase decision. With economic uncertainty still weighing on younger buyers, the long view may be the only one they're willing to take. "When you take all these factors into consideration, it's easy to see why some from both generations are scrapping the whole starter house idea and waiting to make a purchase on the home they want to keep," Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek. Roughly 61 percent of Americans say they feel less confident they will own a home in their lifetime than they were five years ago, according to BMO. For non-homeowners with children, 57 percent of those polled by BMO say that saving for education or childcare is a more important financial priority than buying a house. Gen Z has also prioritized buying a car (50 percent) while millennials are looking to save for retirement (54 percent). What People Are Saying Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: "Millennials and Gen Z are opposed to starter homes, because that term truly no longer exist. The mere concept of 'starter home' is something that is much less affordable and can now be seen as a home they will stay in for a longer term. With rates being higher than years past along with much higher housing costs, the concept of 'the starter home' will go the way of the dinosaur." Michael Ryan, a finance expert and the founder of told Newsweek: "They want to, they can't. They can't afford it." Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "For decades, the concept of a starter home made sense to younger Americans. You could purchase a smaller property before having children, make payments that were potentially less than renting, and then have a home you could sell to fund a new property when the time was right. However, in the current real estate market, higher home prices and mortgage rates have produced monthly payments above renting costs, down payments are an issue for many given the accelerated cost of living, and many millennials and Gen Z are putting off those major life milestones in general." Drew Powers, the founder of Illinois-based Powers Financial Group, told Newsweek: "This homebuying trend is representative of generational shifts in how we work, what we value in life, and our lived experiences. Gen Z and Millennials have spent less time working in an office and more time working from home, they are getting married and starting families later, they tend to value experiences over possessions, and they came of age through multiple housing and interest rate markets. The idea of the starter home may not make sense given these trends." "On average, these generations are having kids almost a decade later than their grandparents. By that time, they are ready for their forever home. They have also seen low interest rates and multiple housing market crashes, so many are waiting on the sidelines for the next downturn to find a more affordable price and mortgage rate." What's Next The starter home may become a relic unless affordability improves. Builders and lenders may need to shift toward products that support long-term ownership from the start. "Down the line, younger generations will put off buying homes much longer and be resigned to renting," Thompson said. "This has more than just an impact on housing, this will have impacts on marriage rates and birth rates as people will not only hold off home purchases, but also delay starting families."
Cision Canada
05-05-2025
- Business
- Cision Canada
BMO Survey: Rising Recession Concerns Among Canadians Sidelining Prospective Homebuyers
Half believe owning a home is less attainable than in 2024. 43% of homeowners say they could not have purchased their home without family assistance. TORONTO, May 5, 2025 /CNW/ - The latest BMO Real Financial Progress Index reveals that while over two thirds (67%) of homebuyers are waiting for interest rates to drop before purchasing a home – a 5% decrease from 2024 – experts say many more Canadians may take a "wait and see" approach as concerns about the prospect of an economic recession increased from 60% to 74% from March to April 2025. "Canada's housing market remained under pressure heading into the spring, with sales and prices both weakening further," said Robert Kavcic, Senior Economist, BMO Capital Markets. "There is some clear underlying weakness as inventory builds and investors remain absent. Suffice it to say, homebuyers are losing confidence and motivation, especially in areas of B.C. and Southern Ontario." The BMO survey examines how concerns about the economy have influenced Canadians' homebuying decisions: Revisiting Rates: Over two-thirds (67%) of prospective homeowners believe rates affect their buying decisions. Two in five (38%) Canadians are waiting for rates to drop to 3% or lower before purchasing or refinancing home. In addition, 44% admit they are unsure about the rate they would be comfortable with to move forward with buying or refinancing their home. Missed Momentum: When looking at the current housing market, 56% of prospective homeowners feel they missed their moment to buy a home. Two-thirds (66%) of Millennials feel they had missed their homebuying moment – more than any other generation. Challenged Confidence: While 59% of Canadians believe homeownership is one of their greatest life aspirations, half (50%) believe owning a home is less attainable than it was 12 months ago, and two-thirds (66%) are less confident that they will own a home in their lifetime compared to five years ago. Deferred Demand: Among the 38% of homebuyers planning on purchasing a home in the near future, only 14% plan to in 2025 and a quarter (24%) plan on doing so in 2026 or later. Location, Location, Location: More than half (52%) of aspiring homebuyers would consider moving to a different province or country in order to afford buying a home. "While current economic conditions present uncertainties and challenges, there are opportunities for Canadians to achieve the goal of homeownership with guidance and planning," said Gayle Ramsay, Head, Everyday Banking Segment & Customer Growth, BMO. "Working with a professional advisor can help homebuyers stay informed and navigate the current environment, understand the strategies available, then develop a personalized plan that prioritizes resilience and long-term stability, empowering them to pursue homeownership while making real financial progress." Despite short-term concerns about the housing market, the BMO Real Financial Progress Index found over two thirds (70%) of Canadians feel confident in their financial situation, but fear of unknown expenses (82%), concerns about their overall financial situation (81%) and housing costs (72%) are among the leading sources of financial anxiety. Reimagining the Canadian Dream While 57% of homebuyers believe homeownership is more about attaining a life milestone than making a good investment, many are re-evaluating their approach to homebuying: Bank of Mom and Dad: 43% of homeowners say they could not have purchased their home without assistance from family. Over a quarter (27%) of Canadians expect financial support from their parents and/or grandparents, with 6% expecting assistance for the down payment for a home, 8% expect help with monthly rent and 7% expecting support for home renovation costs. Among the 39% who plan to provide financial help for their child(ren) and grandchild(ren), 5% plan to contribute to the down payment for their home and 4% plan to contribute toward their First Home Savings Account (FHSA). Shared Homeownership: 45% would consider buying a home with friends, family members or other people they are not romantically involved with, with Gen Z (63%) and Millennials (50%) being the mostly likely to consider a shared homeownership approach. Reconsidering Renting: 61% of Canadians are content renting and do not feel pressured to buy a home, a sentiment highest among Boomers (83%) and Gen X (61%). Over half (51%) of Canadians believe renting is more flexible. "While homeownership continues to represent financial progress for many, we are finding Canadians are beginning to explore new and different pathways to meet their goals as economic uncertainty grows and priorities shift," said Ms. Ramsay. "As many first-time homebuyers explore new options or wait for their chance to enter the market, we encourage Canadians to work with a professional advisor or planner to learn more about the different paths to homeownership and build a personalized financial plan them get into the home they want within a realistic timeline." BMO Helps Homebuyers Make Real Financial Progress BMO offers convenient tools and resources to help customers throughout their homebuying and homeownership journey including: First Home Savings Account (FHSA): 58% of Canadians plan on using the FHSA and/or Home Buyers' Plan (HBP) from their Registered Retirement Savings Plan (RRSP) for their home purchase. The FHSA is a tax-advantaged registered savings plan that combines the benefits of a Registered Retirement Savings Plan (RRSP) and a Tax-Free Savings Account (TFSA), where contributions are tax deductible, earnings are tax-sheltered, and withdrawals are tax-free when used towards qualified first-time home purchases. First-time home buyers can contribute up to $8,000 a year, with a lifetime contribution limit of $40,000. BMO SmartProgress: Customers can learn more about homeownership, budgeting, and other personal finance topics from BMO SmartProgress. The online education platform organizes personal finance topics into playlists, enabling Canadians to learn more about how to manage their finances in a widely accessible and innovative platform. Pre-Approval: For homebuyers, getting pre-approved provides a cushion for due diligence when purchasing a home. In addition to visiting a local branch to speak with an advisor, BMO offers the ability for homebuyers to apply for mortgage pre-approval online. BMO also offers the longest rate guarantee period of any major Canadian bank at 130 days. Pre-Qualification: To get started with their homebuying journey, prospective homebuyers can get a mortgage estimate in one minute with a 130-day rate hold. Using a soft credit check that will not affect their credit scores, customers will be able to know how much they can potentially afford for a home, based on information such as income, assets, and debt. Mortgage Renewal Tools: To help prepare for a mortgage renewal, customers can get a tangible sense of their mortgage payments upon renewal using BMO's mortgage renewal calculator. Customers can also view their personalized renewal rate 180 days before renewal and quickly renew their mortgage in the BMO App or Online Banking. For more information about first-time home buyers programs and affordability tools, visit: To learn more about how BMO can help customers make financial progress, visit Launched in February 2021, the BMO Real Financial Progress Index is an indicator of how consumers feel about their personal finances and whether they are making financial progress. The index aims to spark dialogue that will help consumers reach their financial goals and to humanize a topic that causes anxiety for many – money. The research detailed in this document was conducted by Ipsos in Canada from March 3 rd to 26 th, 2025. A sample of n=2,500 adults ages 18+ in Canada were collected. To account for recent changes in the economic situation, certain questions were asked again among a sample of n=2,001 adults ages 18+ in Canada from April 17 th to 20 th, 2025. Quotas and weighting were used to ensure the composition of both samples reflects that of the Canadian population according to census parameters. The surveys have a credibility interval of +/- 2.7 per cent 19 times out of 20, of what the results would have been had all Canadian adults 18+ been surveyed. About BMO Financial Group BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.5 trillion as of January 31, 2025. Serving customers for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to 13 million customers across Canada, the United States, and in select markets globally. Driven by a single purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and inclusive society.
