Average price on homes in Calgary is on the rise, reflecting an increase in the income required to afford a mortgage for that average home.
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To purchase an average-priced home in Calgary in May, cited as $587,100 in the study, a buyer required an annual income of $120,520, based on a 20 per cent down payment, and 5.49 per cent interest rate for a five-year fixed mortgage.
The caveat, however, is that buyers had to qualify for the OSFI (Office of the Superintendent of Financial Institutions) stress test, which is 200 basis points higher, or 7.49 per cent.
The income required increased $1,060 from April, the fourth largest jump in Canada.
That’s despite the mortgage rate decreasing from 5.5 per cent.
The study noted that the increase in qualification income is a result of the average price rising $6,200 in May from $580,900 in April — again, the fourth highest increase in dollar terms among cities.
Hamilton saw the largest increase in income required, up $1,550, with buyers needing $171,100 to qualify for a mortgage for a home with an average cost of $868,300, which increased by $9,400 from April to May.
Halifax saw the largest decrease in income required to qualify for a mortgage, falling $2,070 to $111,890, while the average price of a home fell $11,000 month over month to $539,200.