Home ownership slightly more affordable, but not affordable enough: RBC Economics

Home ownership is slightly more affordable, according to the latest home ownership affordability survey released by RBC Economics this morning, but ownership is still not very affordable for tenant households. For instance, RBC Economics reports that a Canadian homeowner would have to pay 39% of their average weekly earnings for a typical bungalow – a drop of slightly more than one percentage point from last quarter, but still significantly above the 32% limit that RBC defines as ‘affordable’. Other experts say that the affordable guideline should be no more than 30% of income. RBC reports that a prospective owner would need an annual income of $72,500 and a down payment of $81,325 to move into that bungalow. Canada Mortgage and Housing Corporation reports that the median (middle) tenant household after-tax income in 2008 was $33,100 (less than half the income required for a bungalow), and net worth for tenant households is $14,000 (a fraction of the down payment required).