North America Housing affordability fell in Q2 and is likely to worsen

The Housing Affordability Indices (HAIs) show affordability deteriorated in nearly all US and Canadian metros in Q2 2021 as home price inflation outpaced income growth. Our consistent, cross-country framework points to more rapidly worsening affordability in Canada than in the US.

What you will learn:

• Potential buyers will find homes most out of reach in Vancouver, Boise (Idaho), Toronto, Portland (Oregon), Hamilton (Ontario), Las Vegas, San Jose, and L.A.
• Our national US index rose 3 points (pts) to 0.77 in Q2 from 0.74 in Q1, meaning prices were 23% lower than the median income households’ borrowing capacity. Higher mortgage rates and home prices more than offset stronger household incomes – a trend that will persist next year. 
• Affordability in major metros in the neighboring Southwest & Mountains region will also decline. The HAIs of Phoenix, Denver, and Salt Lake City will rise 6pts on average through the end of 2022.