Image by: pixabay

The Bank of Canada reported the most concerning levels of housing affordability in over 40 years during the last quarter, attributing this to surging housing prices and escalating mortgage rates. Ottawa is responding by proposing a new housing strategy aimed at rejuvenating wartime homebuilding efforts to alleviate the soaring costs and restore market affordability. The Bank of Canada's housing affordability index, tracking mortgage payments and utility expenses in relation to income, hit its highest level since 1982, signifying the gravest strain on affordability.

Forecasts suggest a potential worsening of the affordability crisis in the current quarter, especially if mortgage rates continue their upward trend. However, recent declines in bond yields—used as a benchmark for fixed-rate loans—might eventually ease pressure on the mortgage market. Economists like Porter have drawn attention to historical patterns, noting that Canada faced recessions shortly after previous spikes in housing unaffordability, underscoring concerns that the country's economy may struggle to grow in 2024, with some major banks even predicting a mild recession early in the year.

Read the full article on:  Global NEWS