Dreams of affording a home in Calgary are becoming closer to reality, as the income required to buy a home in Alberta’s largest city has significantly dropped.
A recent report from Ratehub.ca calculated the minimum annual income needed to buy a home in Calgary using real estate data from July and August 2024. Ratehub detailed how changing mortgage rates, stress test rates, and real estate prices impact the income needed to buy a home.
In August, hopeful homeowners needed a minimum income of $117,360 to buy a home in Calgary. That’s $1,620 less than Calgarians needed to buy a home just one month earlier.
The income requirements weren’t the only figure that dropped in August. The average home price for a place in Calgary saw a $2,500 decrease, with the average cost coming to $586,100 in August.
ratehub.ca
Ratehub credits the income requirement drop to federal rate cuts, which have lowered the cost of borrowing in Canada.
“Affordability improved in the majority of the cities we looked at because interest rates continued to drop month-over-month,” Ratehub said.
The report shared that the affordability improvements are expected to continue, with at least two more rate cuts in 2024. The next announcement on interest rates is scheduled for October 23, 2024.
New mortgage qualification rules implemented this month are also anticipated to impact real estate affordability. The down payment hurdle for buyers is expected to ease with the mortgage changes announced by the federal government, including a $1.5 million price cap for the insured mortgage purchase and the extension of amortization periods to 30 years for first-time home buyers and new build purchases.
“The real estate market is poised to heat up in coming months as further rate cuts, and newly-announced mortgage rules for first-time buyers, come into effect,” Ratehub said.