Stable early-spring sales eroded affordability in 10 of 13 Canadian markets in March

Canada’s early spring real estate market may have yet to fully defrost, but stable sales pushed prices up by a tick in March – and made it slightly less affordable for those looking to scoop up an off-season deal.

This is according to the latest affordability study from Ratehub.ca, which found buying conditions worsened in 10 out of 13 markets. The study defines affordability as the amount of money a prospective home buyer would need to earn to qualify for a mortgage in their city, and tracks whether it goes up or down on a monthly basis. This provides a real-time snapshot for how affordability conditions are evolving across Canada, based on national real estate data, the average five-year fixed mortgage rate, as well as the mortgage stress test rate.

The March edition found the average mortgage rate dipped on a month-over-month basis, coming in at 4.39% compared to 4.41% in February. The corresponding stress test – which tacks 2% onto the actual contract rate you get from your bank – decreased to 6.39% from 6.41%. However, this was offset by increases in the benchmark home price in most of Canada’s major cities; while not substantial price growth, it was enough to move the dial and cause the average borrower to qualify for a smaller mortgage amount. 

Here’s how that played out in markets across the country.

March 2026: How much did you need to earn to buy a home in Canada?

This report is for illustration purposes only. Data is based on a mortgage with a 10% down payment, 25-year amortization, $4,000 annual property taxes and $150 monthly heating. Mortgage rates are the average of the Big Five Banks’ 5-year fixed rates in March 2026 and February 2026. Average home prices are from the CREA MLS® Home Price Index (HPI).

As has been the case in recent months, the housing markets that saw affordability worsen by the largest degree were cities where home prices are well below the $1-million mark, and overall better aligned with incomes; this has helped support buying demand even as interest rates have fluctuated, and other economic factors – such as tariff fears and spiking gas prices – have dissuaded buyers from participating in Canada’s pricier markets. Smaller cities that also face supply constraints, with overall fewer homes for sale, saw prices rise by the most on a monthly basis.

This was most evident in Halifax, which saw the most significant home price increase – up by $13,100 from February to a benchmark of $571,700 – in March. This resulted in an increase of $2,270 in additional income required to purchase the average home. Halifax saw a big change last month too. The Halifax borrower in this scenario would pay $61 dollars more on their monthly mortgage payment, or $732 per a year, in March compared to if they bought in February.

Victoria also saw a big dip in affordability, as the benchmark home price rose $13,500 month over month to $886,000, leading to $2,230 in additional income required to purchase the average home. The Victoria borrower in this scenario would pay $60 dollars more on their monthly mortgage payment, or $720 per a year, in March compared to if they bought in February.

Fredericton was the only city that saw reasonable improvement in home affordability; the benchmark home price decreased by $5,700 to $357,700, requiring $1,210 less income required to purchase the average home. This is a welcome change from March when Fredericton saw home affordability worsen. The Fredericton borrower in this scenario would pay $32 dollars less on their monthly mortgage payment, or $384 per a year, in March compared to if they bought in February.

Vancouver and Toronto, meanwhile, ranked eighth and tenth respectively; while the benchmark home price in both eased by $4,000 and $3,000, they remain prohibitively expensive for many buyers, at $1,104,300 and $941,800. This price point has led to sluggish activity in recent months, as buyers are more sensitive to changes in interest rates.

How will Canadian home affordability change in April?

It’s important to note that while mortgage rates were largely stable in March, that won’t be the case for April; bond yields have spiked over the course of the month, becoming entrenched in the 3.0% range, which has caused lenders to increase their fixed rates by between 25 - 40 basis points. For example, the lowest five-year fixed insured rate available in Canada rose to 4.04% from the previous 3.79%. 

Yields are on the rise due to investor unease over escalating conflict in Iran, as well as growing inflation risks; as oil prices have shot up following the closure of the Strait of Hormuz, that’s led to fears consumer prices will grow out of control, like they did post-pandemic. That could force central banks to hike interest rates; as higher rates devalue bonds, investors sell them off (causing yields, which have an inverse relationship with bond prices, to rise) when markets expect tighter monetary policy is on the way. 

However, while the expectations of a hike are starting to take form, the Bank of Canada is unlikely to make a move in its upcoming rate announcement on April 29. While the latest March inflation data showed the year-over-year rate of inflation rose to 2.4% from 1.8% in February – again, reflecting rising energy prices – BoC Governor Tiff Macklem stated rate policymakers will largely shake this off, given core inflation metrics remain within control. However, he emphasized that should inflation start to seep out of just the energy category, and into other consumer price types over the medium term, that could likely prompt a rate hike in the future.

These rising pressures have also prompted the Canadian Real Estate Association (CREA) to revise its housing marketing outlook for 2026; in its data package released on April 16, the association stated that market recovery has been slower than expected, as the rising cost of living and interest rates continue to discourage sidelined buyers, and particularly first timers.

Should interest rates continue to climb, it will likely have a chilling effect on the slight green shoots seen so far in the early-spring market; it remains to be seen how these geopolitical complications will play out and impact borrowing power and buyer sentiment in the months moving forward.

Also read:

• Canadian home sales hold steady in March 2026, but recovery will be slower than expected
• It became harder to buy a home in most Canadian markets in February
• Bank of Canada holds rate at 2.25% for the third time in March