Housing more affordable in second quarter amid low mortgage rates
The Canadian Press
Published Thursday, August 28, 2014 6:08AM EDT
Last Updated Thursday, August 28, 2014 8:34PM EDT
TORONTO - The Royal Bank (TSX:RY) says housing was more affordable across Canada in the second quarter as low mortgage rates offset solid price increases.
In its latest Housing Trends and Affordability Report, the bank says it found that owning a home was more affordable in virtually all provincial and major local markets in the quarter.
The RBC housing affordability measure captures the proportion of pre-tax household income needed to service the costs of owning a specified category of home at current market values. A fall in the measure represents an improvement in affordability.
During the second quarter, affordability measures at the national level fell by 0.9 percentage points to 48 per cent for two-storey homes, by 0.6 percentage points to 42.5 per cent for detached bungalows and by 0.4 percentage points to 27.4 per cent for condominium apartments.
In May and June, Canada's home resales picked up and contributed to a 9.4 per cent seasonally-adjusted advance in the second quarter, which was the strongest quarterly gain in nearly four years.
RBC chief economist Craig Wright says that while a rebound in activity after the harsh winter weather was anticipated, the housing market also got a big boost from the biggest drop in fixed mortgage rates in almost four years.