The report suggests that housing affordability levels were generally unchanged in the first quarter of 2013. All three of the major components of the affordability calculation
- mortgage rates,
-home prices and
-incomes - each remained more or less flat over the most recent quarter.
Variability across local markets in Canada was also minimal. RBC concludes that, based on its analysis of the relationship between home prices and general housing affordability since the 1970s, current affordability levels are outside the “danger zone”. Their conclusion is therefore that there is no imminent price correction on the horizon. Rising interest rates present the clearest threat to affordability but RBC expects rates to remain at their current levels for at least another year.
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