The income required to buy a home in Alberta’s largest cities has fallen, thanks to factors including rate cuts that have effectively lowered borrowing costs in Canada.
A new report from Ratehub.ca calculated the minimum annual income required to buy an average home in some of Canada’s major cities based on June and July 2024 real estate data.
The report details how changing mortgage rates, stress test rates, and real estate prices are impacting the income required to buy a home.
In July, Calgarians hoping to buy a home needed to make around $118,980, while Edmontonians needed $85,560. That’s $1,690 less than what was needed in June for YYC and $1,360 less than the previous month in YEG.
The average home price in both cities also fell slightly, now at $399,700 in YEG and $588,600 in YYC.
Ratehub
“The impact of the Bank of Canada’s June and July rate decreases, which chopped the benchmark interest rate from 5% to 4.5%, was evident across the nation, with affordability improving in all 13 markets – for the first time since January,” Ratehub said.
Ratehub noted that the average five-year fixed mortgage rate dropped to 5.29%, compared to 5.47% in June, and the mortgage stress test lowered to 7.29%.
“As a result, the income required to qualify for a mortgage fell by more than $5,000 in Canada’s most expensive housing markets.”
Toronto led the way in terms of improved affordability, with $5,410 less income required to purchase the average home compared to June.
It was similar in Vancouver, where the average monthly price dropped by $9,400 to $1,197,700. As a result, borrowers needed $5,020 less income to qualify for a mortgage.