Income required to buy a home in Ottawa dropped $750 in September

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Home affordability improved in Ottawa in September, as the average price for a new home and the mortgage rate decreased slightly in the fall.

A new report from Ratehub.ca shows homebuyers needed to earn $134,500 to buy an average-priced home in Ottawa in September, down from $135,250 in August and $134,860 in July.

The report shows the average price of a home in Ottawa dropped $2,800 in September to $627,200.

Ratehub.ca looks at the income required to buy a home with a 10 per cent down payment, a 25-year amortization, $4,000 in annual property taxes and a monthly heating bill of $150. The mortgage rate was 4.47 per cent (down from 4.49 per cent in August) and the stress test rate of 6.47 per cent (down from 6.47 per cent in August).

Ottawa was one of 11 Canadian cities in the survey to see mortgage affordability improve in September.

“It got easier this month to afford a home in the majority of the cities we studied,” Penelope Graham, a mortgage expert at Ratehub.ca, said in a statement.

“Mortgage rates were relatively flat month-over-month, which means home prices were the primary driving factor for the improvement. Home prices had decreased in the majority of the cities we looked at.”

The average income required to buy the average-priced home in Toronto dropped $2,130 in September to $198,030, while the income required to buy a home in Vancouver dropped $2,000 to $232,700.

Montreal and Halifax were the only Canadian cities to see the income required to buy a home increase. In Montreal, the income required to buy the average-priced home was $125,300 in September, up from $124,260 in August.