What Does Housing Affordability Mean?
Housing affordability is an important factor that’s on the minds of a lot of home buyers, particularly when market prices are on the rise and the economy is more unpredictable than usual. But what exactly do we mean by housing affordability and how can it affect you when it comes to buying your dream home? Let’s take a look at some of the key factors.
What Is Housing Affordability?
Housing affordability is a term that’s used to describe the cost of housing relative to income. Generally speaking, housing should take up no more than 30% of a household income to be considered affordable.
There are many factors which affect housing affordability, such as the location and size of a home and housing prices in the area, along with external factors such as family income and the current mortgage interest rate.
Overall, housing affordability is an important consideration for anyone looking for a place to live and should be taken into account when choosing where to buy or build a home.
Free Online Tool: Mortgage Affordability Calculator
How Has The Definition Of Housing Affordability Changed?
In recent years, there has been much discussion about housing affordability – many have argued that the definition has changed over time, as housing costs and incomes have shifted in different ways. For example, some economists suggest that housing is increasingly unaffordable due to rising interest rates and stagnating wages. Others point out that housing remains affordable for low-income families in many parts of the country, since housing benefits and other government programs help to make housing more affordable for them.
Overall, the definition of housing affordability is complex and depends on multiple factors, including regional differences and changes to economic policies. Some may argue that housing affordability is worsening over time, while others might posit that it has remained relatively stable. Ultimately, the understanding of what constitutes housing affordability will continue to evolve as our economy shifts and evolves alongside it.
How Has The Market Changed Our Perception Of Affordability?
Over the last few decades, a number of economic trends have altered the general perception of housing affordability. Aside from rising house prices, newer services such as Airbnb and HomeAway have made housing in popular areas into more of a business-oriented proposition, with houses being seen as an asset to be bought and sold rather than as a place to call home.
What Is An Affordability Index?
A housing affordability index is a metric which measures the average person’s ability to buy a home in a given area. Ideally, housing markets should maintain a relatively high affordability index, indicating that housing remains accessible to the majority of people in that market. This can help to ensure a robust housing market that supports economic development and keeps housing prices stable over time.
There are several methods for calculating housing affordability indices, each with its own advantages and drawbacks. Ultimately, it is up to policymakers and housing experts to decide which measure will be most useful for their particular context. Regardless of the method chosen, however, an affordability index offers a valuable tool for assessing the health of a housing market and helping to guide future policy decisions.
One of the most popular affordability indexes in Canada is the RE/MAX Housing Affordability Index, which examines affordability based on factors such as the average sale price of a home, median household income, the monthly cost of a mortgage and the percentage of household income that would go towards the monthly mortgage payments.
How Does Housing Affordability In Edmonton Compare To The Rest Of Canada?
Affordability can be challenging for those living in large cities like Edmonton or Toronto. In urban centers, housing is often fairly expensive and the average wage may not be high enough to allow residents to cover housing costs while also meeting their other financial obligations.
However, there are some differences between housing affordability in Edmonton compared to cities such as Toronto and Vancouver.
|Average Mortgage Payment
(as a percent of income)
Looking at the above numbers, only Regina and Edmonton come in at under 30%, which makes Edmonton one of the most affordable cities in Canada.
Ultimately, housing affordability is determined by many different factors: economic conditions, housing availability, and wages among others. Regardless of where you live, it’s important to do your research and explore all of your housing options in order to find the most affordable housing possible.
If you’re ready to take the plunge and you’ve set your home-buying budget, it’s time to start looking for a home that’s affordable for you. Get in touch with us today or take a look at our selection of home models designed to fit every budget, and you’re sure to find an option that’s perfect for you.
About the Author:
At Sterling Homes, our mission is to provide the opportunity for affordable homeownership without compromise. Over the last 70 years, Sterling Edmonton has quickly become one of Edmonton’s most popular builders. We bring more than seven decades worth of exceptional customer service, superior design and unparalleled craftsmanship to the greater Edmonton area. As a member of the Qualico Group, Sterling Homes focuses on greater Edmonton’s finest family communities, while being able to offer some of the region’s most family friendly prices thanks to volume purchasing power for materials, trades and land. This has not only made Sterling one of Edmonton’s bestselling, move-up builders, but also one of the industry’s most respected home providers. It is through our uncompromising commitment to our customers that we proudly deliver the Sterling Advantage – that’s why each and every home we build includes a 10-year home warranty, a completion guarantee and new home warranty excellence rating. Our Advantage is our pledge that, when you build your dream home with Sterling, we will deliver a timely, well-built home you’re sure to enjoy for years to come.
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