(CEP News) Ottawa – Housing affordability is at its worst level in 18 years as a result of sound macroeconomic fundamentals such as job growth, says a report released from RBC Economics on Friday.
However, the report also says most Canadian markets will see that lack of affordability improve in 2008 as price increases weaken, incomes grow and rates for popular five-year mortgages are reduced.
“Housing affordability deteriorated across the country in every quarter in 2007, to end the year at its most unaffordable level since 1990,” said RBC assistant chief economist Derek Holt. “Back then, soaring interest rates and a recession sparked much of the trouble. Today, a long upward trend in house prices driven by sounder macroeconomic fundamentals, like job growth, is primarily responsible for the deterioration in affordability.”
