Research Briefing | Jul 15, 2022

Home affordability worsens as rates rise

Housing affordability deteriorated in Q1 2022 in both the US and Canada, according to our updated Housing Affordability Indices. Income growth hasn’t mitigated the pressure of higher home prices and mortgage rates. Homes were most out of reach in western US and Canadian metros, led by Vancouver, Toronto, Boise (Idaho), Hamilton (Ontario), Los Angeles, San Jose, and Portland (Oregon).

What you will learn:

  • Our US national HAI rose 8pts to 0.88 in Q1 2022 from 0.80 in Q4 2021, meaning prices were 12% below the borrowing capacity of median income households at the start of 2022.
  • Our national Canadian HAI worsened 14pts to 1.51 in Q1 2022, as rising mortgage rates and a 13% q/q jump in house prices led to a further deterioration in affordability.
  • Affordability worsened in all 23 Canadian metros covered in Q1, led by London (+19pts), Brantford (+18pts), Toronto (+18pts), Guelph (+17pts) and Hamilton (+17pts).
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