Housing affordability challenges remain despite recent improvements: CMHC

A new analysis from the Canada Mortgage and Housing Corp. shows housing affordability challenges have eased in recent years but still remain at historic highs, and have even spread to other major cities.

The national housing agency says affordability issues are no longer limited to Canada’s largest cities and have spread to other areas such as Ottawa, Montreal and Halifax. One of the key factors, CMHC said, was the impact of labour mobility brought on by remote work during the COVID-19 pandemic, which has persisted even as the job market has changed.

“Affordability started recovering slightly since 2023, when it reached historical lows. For home ownership, we observed improved affordability, while for renters we saw stabilization over the last two years,” said Mathieu Laberge, CMHC chief economist and senior vice-president of housing insights, in a news release Wednesday.

“Even with these improvements, we cannot overlook how much housing affordability has eroded in recent years, especially in Ottawa, Montreal and Halifax, clearly demonstrating that Canada’s housing affordability crisis is no longer limited to Toronto and Vancouver.”

CMHC says its housing affordability composite index provides a more comprehensive picture of affordability and looks at factors like whether incomes are keeping up with the cost of housing, if supply can meet demand, and if households have income leftover after paying for essentials.

Nationally, the report said home ownership affordability hit its lowest point since the 1990s in the second quarter of 2022, with conditions slightly improving since then.

A slow and prolonged erosion of affordability conditions began in the early 2000s, with CMHC’s index showing three periods of worsening affordability. The first of those periods took place between 2001-07, the second between 2015-20 and the third from 2020-23.

Meanwhile, the report said the decline in rental market affordability has been different compared with home ownership affordability, with more recent but less severe impacts. Some of those included the effects of the sharp increase in inflation between 2022-23 and high levels of immigration.

Compared with homeowners, the report said that renters generally have less discretionary income to overcome inflationary pressures, meaning their housing budgets are more easily compressed.

While Canada continues to experience a housing crisis, CMHC said, affordability challenges are likely to continue to be a concern even if they are expected to ease over time.

Going forward, CMHC says it will regularly update its housing affordability index.

This report by The Canadian Press was first published Feb. 25, 2026.