Top 3 Stocks to Accelerate Your Path to Homeownership via an FHSA

Canadians who are gunning for home ownership should snatch up stocks like goeasy (TSX:GSY) in their FHSA.

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The rate of home ownership in Canada has dipped marginally in the first part of the 2020s. However, it remains at a respectable 66% at the time of this writing. Home sales in Canada have dipped in the face of the most aggressive interest rate-tightening policy in over 15 years. Meanwhile, home prices have held up due to low supply, high immigration, and strong demand. Today, I want to explore how Canadians who want to be homeowners can pursue that dream with the help of the First Home Savings Account (FHSA). Moreover, I want to target three stocks that can help us reach our goal. Let’s jump in.

What is the FHSA and how does it work?

The FHSA was introduced by the federal government in 2023. This new registered account provides qualifying first-time home buyers with a tax-advantage account to accumulate a $40,000 down payment. Qualifying individuals may contribute $8,000 annually to their FHSA. This is subject to a lifetime limit of $40,000.

To make a tax-free withdrawal, an FHSA holder must meet specific conditions and submit a prescribed form to the CRA. These conditions include being a first-time home buyer, being a Resident of Canada, making the withdrawal within the first 30 days of moving into the home, a written agreement to buy or build a qualifying home entered into before October 1st of the first year following the withdrawal, and the qualifying home must be in Canada.

In our FHSA, I’m looking to target dependable TSX stocks that offer a blend of capital growth and consistent income. This will help us reach our goal promptly and without taking on substantial risk.

This undervalued bank stock offers a balanced approach for prospective homeowners

Scotiabank (TSX:BNS) is one of the Big Six Canadian banks. It is often called “The International Bank” due to its large global footprint, particularly in Latin America. Shares of this bank stock have dipped 1.5% month over month as of mid-afternoon trading on August 3. The stock is down 1.4% so far in 2023.

Shares of Scotiabank currently possess a very favourable price-to-earnings ratio of 9.5. Better yet, this bank stock offers a quarterly dividend of $1.06 per share. That represents a tasty 6.6% yield.

Here’s a dividend aristocrat that is also a top growth stock

Goeasy (TSX:GSY) is a Mississauga-based company that provides non-prime leasing and lending services under the easyhome, easyfinancial, and LendCare brands to consumers in Canada. Its shares have jumped 13% month over month at the time of this writing. Goeasy stock is now up 20% in the year-to-date period.

This stock last had an attractive P/E ratio of 12, which puts goeasy in more favourable value territory than most of its industry peers. The company is forecasting a strong loan portfolio and earnings growth through fiscal 2025. Better yet, goeasy has delivered nine straight years of dividend growth, making it a Canadian dividend aristocrat. It last paid out a quarterly distribution of $0.96 per share, which represents a 3% yield.

One housing stock that can help you fulfill your home ownership dream

EQB (TSX:EQB) is the third stock I’d look to snatch up in our FHSA. This Toronto-based company provides personal and commercial banking services through Equitable Bank. Shares of EQB have soared 42% so far in 2023. The company achieved record earnings per share (EPS) in its recent second quarter (Q2) fiscal 2023 earnings.

Shares of EQB still possess a very favourable P/E ratio of 8.7. Moreover, this red-hot stock offers a quarterly dividend of $0.37 per share, representing a modest 1.8% yield.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has positions in Goeasy. The Motley Fool recommends Bank of Nova Scotia and EQB. The Motley Fool has a disclosure policy.

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