Young people's money problems rapidly changing classic Canadian household structure
High consumer debt levels and stressful financial situations are leading to a rise in multigenerational living across Canadian homes.
That’s according to a new report from Equifax Canada, which found that consumer debt has climbed to over $2.5 trillion in the second quarter of 2024, a 4.2% increase since the same time last year.
Credit cards continue to be the main driver of rising debt, as Equifax noted that outstanding balances for Canadians have reached $122 billion, up 13.7% from Q2 2023.
Canadian cardholders carried over $4,300 in credit card balance — the highest since 2007.
Young Canadians taking a financial hit
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Equifax reports that a significant number of Canadian consumers (one in 23) missed a payment on at least one credit product in Q2 2024.
Younger Canadians between 26 and 35 are struggling the most with payments as their missed payment rates were 1.99% — a whopping 21.6% increase from the same time last year. This group has been heavily burdened by auto loans and lines of credit, added Equifax.
According to another recent survey from Leger, Canadian students are also struggling with finances and debt.
The poll found that 44% of post-secondary students spend the majority (at least three-quarters) of their total income on funding their education without factoring in food and living expenses.
Over one in four (26%) said they would consider dropping out of school altogether because of money.
Money struggles shape new household model
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With young Canadian adults feeling the stress of debt and the high cost of living, Equifax noted that this is also changing how living arrangements look across the country, as many are opting for multigenerational housing.
“As economic challenges persist and immigration patterns evolve, a growing number of young Canadians are finding themselves living with their parents and grandparents, reshaping the traditional family structure in Canada,” reads the report.
The data found that 29.2% of households in Canada currently include an adult child living with their parents, an increase of 26.7% from 10 years ago.
Ontario has seen a significant number of young adults live with their families, with 32.8% of households identifying as multigenerational.
It also appears that Canadians are finding more creative ways to afford homes, as many are teaming up with family members.
A 2023 Royal LePage survey on Canadian adults who co-home a home with someone other than their spouse found that 76% of respondents said they had to consider the option due to “lack of housing affordability.”
In addition, 18% of people surveyed said they own a home with their adult children, 15% with their siblings or siblings-in-law, 7% with a friend, and 8% with someone who isn’t a friend or a family member.
Are you a young Canadian adult who has opted for a multigenerational living situation due to financial pressures? Email us at [email protected], and we’ll contact you for a future story.