November 29, 2010
Canadian home prices have been increasing with no end in sight, much to the chagrin of potential first-time home buyers. But now, it looks like lower prices and low mortgage rates are making homes slightly more affordable in the True North strong and free.
The index looks at the carrying cost of a mortgage. In layman’s terms: how much do people have to spend out of their income to own a home? It compares the cost of a monthly mortgage payment with a person’s income. Pretty basic.
According to the Financial Post:
The cost for owning a standard two-storey home fell 2.5 points to 46.3% on income, and the affordability rate for condominiums was down 1.4 points to 27.8%.
The rates quoted above are for the third quarter of 2010. And with the Central Bank unlikely to increase rates due to the faltering economic state of the US and the recent reports that housing prices have declined, that trend is likely to continue.
It’s good news for people interested in entering the home market. Word.