Canada's housing affordability saw 'worst deterioration' in 41 years: report

In the second quarter of 2022, Canada's housing market saw the worst deterioration of affordability in 41 years, according to a new report.

The report, published Tuesday by National Bank Financial Markets, looked at the housing markets in 10 metropolitan areas in Canada. National Bank economists gauged affordability by calculating the mortgage payment as a percentage of income (MPPI), which compares a mortgage payment on an average home to the median income.

While home prices continued to rise in the second quarter, affordability mainly deteriorated on the back of rising mortgage interest rates, the reports authors wrote.

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Across the 10 urban areas, the report found the median home price was $810,985 in the second quarter of 2022. A typical mortgage payment for a home at that price would be $4,166, resulting in a MPPI rate of 63.9 per cent -- the highest since 1982, according to the report.