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Global News
12 hours ago
- Business
- Global News
Buying a house got costlier in May. What should your household income be?
Signs of a rebound may be emerging in Canada's real estate market after months of declining home prices. While buyer-friendly conditions persist in some markets, many Canadians will have to shell out more for their monthly mortgage payments, a new report shows. The monthly home affordability report by looked at home prices and mortgage rates from 13 Canadian cities. In eight of those cities, mortgage affordability got worse in May. Penelope Graham, mortgage expert at said the buyer-friendly market conditions are unlikely to last for very long. 'While buyers have enjoyed attractive housing affordability conditions throughout the spring, those days may be numbered. The latest May national housing data reveals sales are firming up over the short term,' she said. While mortgage rates remained largely unchanged, rising home prices mean you'd have to spend more money on your monthly mortgage payments, depending on where you live. For most Canadian cities, the annual household income you'd need to get approved for a mortgage has also gone up. Story continues below advertisement In May, the price of the average Canadian home was $691,299. While that is still down 1.8 per cent compared with this time last year, it is an increase of 1.9 per cent compared with April this year. A Royal Bank of Canada report said buyers are expected to dive back into the market as the uncertainty around U.S. tariffs becomes clearer. 'We expect housing market confidence to gradually rebuild as tariff de-escalation lifts some of the uncertainty that hindered activity earlier this year,' RBC economist Robert Hogue said in the report. 1:54 Business Matters: Canada's housing market in holding pattern, CREA data shows Costlier mortgages The data from Ratehub's report is based on a 10 per cent down payment with a 25-year amortization. The city that saw the highest increase in monthly mortgage payments was St. John's, N.L., where someone locking down their mortgage in May would have to pay $45 more and would need an annual household income of $86,450. Story continues below advertisement 'St. John's saw the most significant increase, with $1,690 in additional income required to purchase the average home. This is due to home prices rising ($8,900), the biggest increase of all the cities,' Graham said. Get breaking National news For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen. Sign up for breaking National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy Halifax also saw affordability worsen, with the average resident paying an additional $38 a month for their mortgage. They would need a household income of $122,830 (an increase of $1,430) to buy a house. Regina (increase of $27) and Montreal (increase of $26) both saw monthly mortgage costs go up. In Regina, you would need an annual household income of $79,350 (an increase of $1,020 since April) and in Montreal, you'd need $124,620 (an increase of $980 since April). After a drop in home prices in April, the price for an average home in Toronto rose $3,400 to $1,012,800 in May. A Torontonian would have to spend $17 more ($5,139 a month) and need an annual household income of $206,500 to be able to afford a home. Winnipeg saw monthly mortgage costs rise by $13 a month to $1,968 and the average Winnipegger would need $88,250 annually to be able to buy a house. Edmonton ($7) and Fredericton ($5) both saw minor increases in monthly mortgage costs. In Edmonton, you'd need an annual household income of $96,670, while in Fredericton, you'd need $78,200. The only city that saw no change in affordability was Calgary. The average home price in the city remained the same as in April ($583,000), as did the monthly mortgage cost ($2,958) and annual income needed to buy a house ($125,170). Story continues below advertisement 2:21 Business Matters: May 'another sleepy month' for homebuyers. Will a rate cut wake them up? Where did affordability improve? 'While the majority of the cities saw affordability worsen, the biggest change was actually in Hamilton, where affordability saw a massive improvement, with $3,480 less income required to purchase the average home,' Graham said. The average home price in Hamilton was $183,100 — a drop of $7,500 since May. Story continues below advertisement A Hamilton homebuyer would need an annual income of $163,020 to be able to buy a house. With a 10 per cent down payment and a 25-year amortization, their monthly mortgage rate came down to $3,973 a month. This means that a Hamilton mortgage buyer who locked down their rate in May would save $93 a month compared with someone who locked it down in April. The decline in home prices comes amid the U.S. trade war and President Donald Trump's 50 per cent tariffs on foreign steel and aluminum. Hamilton is home to major Canadian steel producers and faces growing concerns about the potential for layoffs and plant closures as a result of the tariffs. While Vancouver saw the second biggest decline in home prices, with a decline of $7,500, it remains Canada's most expensive housing market by far, with an average home in May costing $1,177,100. Vancouverites also need the highest annual income of any city in Canada at $237,550 a year. They would also have to pay the highest monthly mortgage of $5,973 with a 10 per cent down payment, although it dropped $38 from April. In May, Victoria came in as the third most expensive housing market in Canada after Vancouver and Toronto, though average home prices dropped to $892,700, with the average homebuyer needing an annual salary of $183,750. Monthly mortgage costs dropped $38 to $4,530 a month. Story continues below advertisement Affordability also improved in the nation's capital, with the average Ottawa home price dropping to $629,800. An Ottawa resident would save $7 on their mortgage payment if they bought in May ($3,196 a month) and would need an annual household income of $134,020 to be able to buy a house.
Global News
10-06-2025
- Business
- Global News
These real estate markets might be showing signs of life, report suggests
After a slow year for real estate in Canada, with some experts describing the spring housing market as 'dead on arrival,' a new report suggests some markets are showing signs of life. A report by the Royal Bank of Canada released Monday said local real estate boards have indicated that home resales picked up in some Canadian markets in May. This was largely due to de-escalation of parts of the U.S. trade war on Canada, the report said. 'The de-escalation of tariffs has taken centre stage since May, alleviating some of the worst fears about the potential economic fallout even though recent doubling of steel and aluminum tariffs increases risks in some communities. We expect to get a clearer view in the coming months,' RBC economist Robert Hogue said in the report. Penelope Graham, mortgage expert at said tariffs have affected buyer confidence but 'cracks of hope' have begun to emerge. Story continues below advertisement 'From a short-term perspective, sales activity has started to pick up. This corresponds with the cracks of hope emerging in the trade scenario,' she said. Anne-Elise Cugliari Allegritti, spokesperson for Royal LePage, said, 'All in all, I think confidence is returning, at least for some Canadians. That's translated into the housing market a bit but in very, very small spurts.' Graham warned that the volatility has not entirely disappeared. 'There's still plenty of downside risks for the real estate market. If we continue to see declines in the jobs market, home sales will likely stay subdued, unless interest rates are cut dramatically,' she said. 1:58 New realtor trends emerging as housing market cools Which markets are picking up? The RBC report said the real estate markets in Toronto, Ottawa, Calgary, Edmonton, Fraser Valley, Saskatoon and Regina all showed some signs of life. Story continues below advertisement The report said that while U.S. President Donald Trump's trade war had 'paralyzed' the housing market in Toronto, home resales picked up 8.4 per cent from April to May. Get daily National news Get the day's top news, political, economic, and current affairs headlines, delivered to your inbox once a day. Sign up for daily National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy However, home prices in Toronto continue to remain low, down 4.5 per cent compared to this time last year. Calgary and Edmonton, too, saw housing activity pick up. 'The trade war likely caused some buyers to pause in recent months, but its cooling impact on demand in Calgary may have been limited — or even short-lived,' Hogue said, adding that housing activity picked up eight per cent from April to May in Calgary. Quebec markets have been bucking national housing trends, Allegritti said. 'The Quebec markets really stand out this year, in not only Greater Montreal but even in Quebec City and some of the other smaller markets in the province,' she said. Median prices for single-family homes and condo apartments in Montreal were up 8.6 per cent and 4.3 per cent, respectively, in May from a year ago — a touch slower than in April, the RBC report said. It added that in many markets, demand now looks sturdy. 'Prairie markets such as Edmonton, Saskatoon, Regina, and some in Quebec including Quebec City and the Atlantic region like St. John's, have held up so far — albeit not entirely unscathed from trade-induced anxiety,' the report said. Story continues below advertisement The ultra-luxury real estate market is also showing solid demand, international realty firm Sotheby's said. According to Sotheby's, five properties worth over $10 million were sold in the Greater Toronto Area in the first three months of 2025. Slower markets While markets in Toronto and the Fraser Valley are picking up, sellers in other parts of Ontario and British Columbia are struggling. 'It should also be noted that some hard-hit tariffed industries, such as manufacturing, are concentrated in these southern Ontario markets,' Graham said. Sellers in Vancouver are being forced to accept lower bids, the report said, as buyers seem to be in no urgency to buy. 'There remains little urgency for potential buyers to make a move in this still-fraught economic environment. Time is on their side with buying options increasing by the day and prices drifting lower,' the report said. Story continues below advertisement What should buyers and sellers do? Despite the uptick in activity, market conditions remain favorable for anyone looking to buy a home this summer. 'I don't have high expectations for the summer. That's a typically quiet time for the housing market across the country,' Allegritti said. 'We will probably see a pick up in the fall, which is typically a busier part time of the year in the housing market,' she said. Buyers can expect higher inventory, more choice and better ability to bargain for a deal, Graham said. 'There is an opportunity to buy a property at a lower price, and lower interest rates mean buyers will qualify for larger mortgage amounts. Buyers also have more leverage in softer markets and can ask for conditions, such as upon financing or inspection, that further benefit them,' she said. Story continues below advertisement For sellers, however, the market remains tricky. 'It's important to have realistic expectations when listing in a down market and to price your property accordingly. An agent who understands your neighbourhood and comparable sales, and who knows how to market your property effectively, can be an important ally,' Graham said.
Calgary Herald
29-05-2025
- Business
- Calgary Herald
Demand up for mortgage renewals, slower for new homes
Prospective buyers have not been as busy to start 2025 as they were in 2024, at least when it comes to getting a mortgage for a new home. A recent report from found that mortgages for new purchases still remain the lion's share of all activity for inquiries on the online mortgage marketplace. Year to date, ending April 30, new mortgages made up 47 per cent of inquiries. Yet that's a substantial drop from last year when 71 per cent of inquiries were for new home purchases. Article content Article content Article content This year, demand for renewals is rising with 39 per cent of inquiries on year to date for mortgage renewal. Article content Article content Refinancing of mortgage inquiries made up the remaining 12 per cent of activity, up from six per cent in 2024. Article content Interest in variable rate mortgages also is increasing, the report found. It cited that five-year, variable rate mortgage made up eight per cent of inquiries on the website from Jan. 1 to April 30. Article content 'Fewer Canadians are looking to purchase a home amid a rocky economic climate.' Article content Renewals are likely to increase as many Canadians got mortgages in May and June of 2020 during the first wave of demand amid very low interest rates caused by the central bank slashing its overnight rate to spur the economy during the start of the pandemic. Article content
Toronto Star
25-05-2025
- Business
- Toronto Star
Breaking your mortgage to land a better interest rate ahead of renewal? Be prepared to pay up
With more than a million Canadians gearing up to renew their mortgages this year, some homeowners are racing to refinance ahead of their renewal due date. Data from rate-comparison site reported that refinance inquiries from Canadians have doubled to 12 per cent in 2025, up from six per cent in 2024. defines a mortgage refinance as breaking your current mortgage and starting a new one, either with the same lender or a different one. ARTICLE CONTINUES BELOW Refinancing can also involve changing your amortization length, lowering your monthly payment or tapping into the equity you've built into your home — all without a prepayment penalty if done at the end of your current mortgage term. These changes can be negotiated at renewal, which entails extending your current mortgage contract to a new term. Experts agree that timing a refinance with your mortgage renewal can help you avoid expensive penalties associated with breaking your mortgage before its end date. Personal Finance Ready to buy your first home? Here are the steps you need to take — and the closing costs you face There are many hoops to jump through when buying your first home, from saving a down payment and Breaking a variable-rate mortgage in the middle of your mortgage term results in a penalty equal to three months' interest, says Penelope Graham, a mortgage expert at rate comparison site Meanwhile, the penalty for breaking a fixed-rate mortgage early is either the greater of three months' interest or a calculation known as the interest rate differential. While refinancing at renewal can save you money on the penalty, there are other costs to prepare for. First, there are legal fees, which cover administrative costs in facilitating the transaction between you and the lender, such as registering the new mortgage and conducting a title search on your property, says Graham, adding that the cost of these services is generally around $1,000. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW There are some cases where your new lender might cover the legal fees for you, particularly if you have a mortgage balance greater than $200,000. 'If you stay with your existing lender, you will likely just need to pay this legal fee and registration fees for the new mortgage,' says Graham. 'But if you are switching to a new lender, you may also need to pay what's called a discharge fee.' Personal Finance Death binder 101: Your guide to assembling documents that make life easier for your survivors Everything from account numbers and subscriptions to social media instructions and passwords are The mortgage discharge fee is the cost associated with transferring the mortgage from the original lender to the new lender. In some cases, Graham points out, your new lender might cover or reimburse the mortgage discharge fee. 'So, if you're shopping around, it's certainly worth asking if that lender is willing to do that,' says Graham. 'Not all of them do, but a good chunk of them do.' Christopher Molder, principal broker at Tridac Mortgage in Toronto, adds that the mortgage discharge fee typically ranges between $250 and $400. If the goal of refinancing is to tap into your home's equity, be prepared to pay an appraisal fee. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW Molder explains that the appraisal process — through a physical inspection or an automated valuation model — determines the market value of your home. This figure is then used to calculate how much equity you have in the home. Molder adds that with tax, appraisal fees can range between $300 to $1,000. Personal Finance Amid U.S. tariff storms, you really need a rainy-day fund. Here's where to park your money Experts says keeping emergency cash liquid is crucial, in an account that earns at least some For borrowers planning to refinance at renewal, Graham recommends exploring your options as soon as possible. ' Refinance rates can be a little bit different than straight purchase rates or renewal rates … so time is certainly a benefit to have on your side, and the sooner you kick off this process of exploring your options, the better off you'll be.'
Toronto Star
04-05-2025
- Business
- Toronto Star
Amid U.S. tariff storms, you really need a rainy-day fund. Here's where to park your money
It turns out, Canadians aren't just nice — we're also pretty good savers. The Financial Consumer Agency of Canada found that as of 2024, 53 per cent of Canadian adults had an emergency fund that could cover three months of expenses. Personal Finance Bringing a dog home just got more expensive. Here's how to keep your best friend happy and healthy on a budget Aspiring dog parents can expect to pay between $1,750 and $4,655 in upfront costs to bring one home. Now, a first-quarter survey by EQ Bank finds that 53 per cent of respondents have increased the size of their emergency savings in the past three months or are planning to do so. Deciding where to park your cash, however, is just as important as how much you put aside. ARTICLE CONTINUES BELOW The general rule of thumb is to have three to six months' worth of living expenses at the ready should your economic life go awry. Personal Finance Death binder 101: Your guide to assembling documents that make life easier for your survivors Everything from account numbers and subscriptions to social media instructions and passwords are But the actual amount you need can vary depending on several factors, including your job stability, says Jason Heath, managing director at Objective Financial Partners in Toronto. 'If somebody is a business owner that is in a sector that's reliant on the economy being good,' says Heath, 'I would be more inclined these days to have a larger emergency fund.' Liquidity is key when deciding where to keep your cash, says NerdWallet Canada spokesperson Shannon Terrell. 'Your emergency fund is like a financial fire extinguisher,' she says. 'You hope you never have to use it, but should the need arise, you want it within reach — not stuffed inside a cabinet.' Natasha Macmillan, director of everyday banking at rate comparison site agrees. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW 'Since emergencies are unpredictable, you'll want an account that is easily accessible. You should be able to withdraw your funds instantly and with no penalties.' Macmillan suggests looking at a high-interest savings account (HISA) or a cashable guaranteed investment certificate (GIC) that allows withdrawals before maturity. Both options offer a balance of security, flexibility and returns, she adds. She also recommends comparing interest rates at various institutions and reading the fine print on whether an account has minimum balance requirements or fees. Some HISAs, for instance, charge a fee after you exceed an allotted number of free withdrawals or transfers. Look for an account that offers Canada Deposit Insurance Corporation (CDIC) insurance, which protects up to $100,000 held in accounts at eligible institutions, Heath advises. And it's generally best to avoid tying up emergency funds in investment accounts, like mutual funds, stocks and ETFs, says Macmillan. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW 'You want your emergency funds accessible and safe, not invested in the market where your funds will fluctuate.' Terrell agrees, adding that it can take days, sometimes weeks, for trades to settle in your account — a difficult timeframe when dealing with financial emergencies. Be careful about keeping your emergency fund in a TFSA or using your RRSP for emergency savings. While TFSA withdrawals are not taxed, Terrell cautions that re-contributing that amount in the same calendar year can trigger a one per cent monthly penalty if you accidentally over-contribute. 'RRSP withdrawals, on the other hand, are subject to withholding tax and are counted as taxable income, which could lead to a bigger bill come tax season.' With tax season wrapped up for most Canadians, Macmillan suggests using a refund to launch your emergency nest egg or to top up an existing one. 'With economic uncertainty ahead, it's a smart time for Canadians to strengthen their financial foundations.'
