08:39 AM EDT, 07/24/2024 (MT Newswires) -- According to at least one measure, Canadian housing affordability has improved slightly from the horrid conditions of the second half of last

year, noted Bank of Montreal (BMO).

The Bank of Canada's (BoC) own measure of affordability eased in the first part of 2024 as rates receded, home prices edged down and incomes nudged up.

Provided prices remain calm, further BoC rate cuts will also gradually bring the market into less extreme circumstances, stated BMO.

Three notes on current affordability:

-- 1. Canada is basically back to levels prevailing in Q2 2022, when rates were beginning to rise with serious pace.

-- 2. Contrary to the popular myth, affordability was close to long-run

norms (payments of about 35% of income) up until the spring of

2021. The affordability crisis is, in fact, quite recent on a national

basis. So, no, Canada cannot pin it on "decades of underbuilding."

-- 3. It's still not as dire as circumstances in the early 1980s or the early 1990s, when affordability was even worse. Both the peak levels of unaffordability, and the sustained averages over four years, were

somewhat more challenging in those episodes. However, BMO noted that it took "brutal" recessions to "fix" affordability in each case.