Reports indicate that Toronto is now less affordable to live in than New York

Rising interest rates and low housing inventory impact both Canadian and American housing markets, but Canadians face greater challenges due to lower median incomes. A Zoocasa report reveals that Vancouver and Toronto are less affordable compared to major US cities like New York and Miami. In 2021, the median household income was CAD 73,954 in Canada and CAD 102,777 in the US, with home prices in Canada surpassing those in the US by over $30,000 despite lower incomes.

Analyzing 40 cities in North America, Zoocasa found discrepancies in housing affordability. Toronto’s median income resembles Dallas’, but its median home price ($718,519) far exceeds Dallas’ ($393,650), creating a substantial affordability gap. Vancouver, even pricier than Toronto, has a significant disparity between median income and home prices. Kitchener-Waterloo faces a considerable gap in affordability compared to Houston, despite similar incomes.

San Francisco exhibits the largest affordability gap, but its higher median income boosts buying power. Nevertheless, five Canadian cities, including Calgary and Winnipeg, offer affordability for median-income earners. Calgary, with the highest median household income, allows buyers to afford homes close to the median price.

Zoocasa’s calculations assumed a 20% downpayment and a 30-year mortgage term. US affordability used a fixed rate of 6.79%, while Canadian affordability utilized a 4.79% rate. Other expenses were not factored in.

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