The Bank of Canada’s housing affordability index improved for the 11th quarter in Q2 2026 but remains far above pre-2020 levels. BMO says incomes and interest rates are unlikely to fix affordability quickly, leaving price declines as the main lever.
Affordability has improved 13.2 percentage points since the Q3 2023 peak of 54.5%, but is still 4.9 points worse than Q4 2019.
BMO’s chief economist Douglas Porter argues incomes take time to rise and further rate cuts seem unlikely, meaning prices would likely need to fall further to restore 'normal' affordability.
Provincial differences matter: significant price declines occurred mainly in British Columbia and Ontario, while most provinces have seen price growth and remain near or above historic highs.
Canada's (BoC) Housing Affordability Index logged an 11th straight quarter of improvement, as falling prices, lower rates, and rising incomes drove a historic correction. Unfortunately, housing remains unaffordable for most households, and affordability is still significantly worse than pre-2020. Further improvements are likely needed to revive the market, and one of Canada's biggest banks sees only one way forward.
Income is the disposable income of an average household, which skews higher than the median, thus overstating affordability. Housing costs here are defined as mortgage payments and utilities, and the index uses a 6-month rolling average of resale prices. So if your comments disappear, it's not because the illuminati is screening you because they hate the truth, it's because you violated our simple rules.
Canadian Home Prices Only Have One Path Forward: BMO. The affordability index fell 0.8 percentage points (ppts) to 41.3% in Q2 2026, shedding 2.4 ppts over the past year. Affordability has actually improved 13.2 ppts since the recent peak of 54.5% in Q3 2023, but that's still one of the worst levels in history.
Canadian home prices climbed for the first time in a little over a year, according to Bank for International Settlements (BIS) Q2 data. Adjust for inflation, however, and the brief gain disappears. Real home prices fell further, reaching their lowest level in nearly a decade—but that doesn’t mean buyers are finding 201
Canada’s real estate recovery has barely begun but it already faces headwinds. Rising inflation and credit demand has the market now expecting 5 rate hikes. This morning, BMO Capital Markets told investors that 5 hikes seems a little much right now. However, the bank warned that rates will rise and mortgage relief for
One economist is calling for prices to fall as sales momentum from earlier in the year has been clawed back
Vancouver shed 1.6% in a single month while Quebec City ran 9% hotter than a year ago
Time for your cheat sheet on this week’s top stories. Canadian Real Estate Canadian Mortgage Rates Set To Rise As Lender Margins Collapse Canadian fixed-rate mortgages are set to surge as bond yields continue to rise. The Government of Canada bond yields jumped 15 basis points (bps) to 3.65% on Thursday, the highest si
Loading more related stories...
Open the app view to save this story, compare related coverage, and continue from the same source.