But the affordability squeeze is showing up in mortgage data. Every one of the 13 major Canadian cities tracked by Ratehub.ca saw home affordability worsen in May 2026, driven by a combination of rising home prices and a slight increase in the average five-year fixed rate among the Big Five banks.
“Both mortgage rate and home price changes impacted home affordability this month. Home prices were up in the majority of the cities and the average of the Big Five Banks’ 5-year fixed rates increased slightly, but enough to have an impact on the income required to buy a home,” said Penelope Graham, mortgage expert at Ratehub.ca.
St. John’s saw the sharpest deterioration, with buyers needing $2,800 more in annual income to purchase the average home compared to April, while monthly mortgage payments rose by $75. At the other end of the scale, Montreal was the least affected, with the income requirement rising by just $10 and monthly payments up by $1. Graham’s advice to those approaching a purchase or renewal is to shop the market now. “As conditions are anticipated to pick up in markets across Canada, it’s important to have an idea of how differing price points and borrowing costs may impact your buying budget,” she said.
Cost of living
The broader cost-of-living picture remains challenging for many households and the Nanos data shows that 55% of Canadians have been affected by rising prices in some way, whether through cancelling a major purchase (16%), finding it harder to cover basic necessities (16%), or facing both problems simultaneously (23%). That combined figure comfortably outweighs the 41% who say inflation has not presented a significant problem for them.
Close to seven in ten Atlantic residents reported some form of cost-of-living impact, well above the national figure. Conversely, older Canadians are far more insulated, with 54% of those aged 55 and above saying inflation has not been a major issue, compared to just 24% of 18-to-34-year-olds.
