Is U.S. Housing Really More Affordable Than in Canada ?
For many in North America, owning a home has long been seen as the ultimate dream, but for a quite awhile, people have been wondering one thing. Which housing market is more affordable, Canadian or American? In this episode, we delve into a comparison of home affordability between Canadian and American cities, explore why many Canadians are considering moves or investments south of the border, and examine median incomes and the cost of living across the continent. We also discuss where the next real estate opportunities might lie and weigh whether it's truly worth entering the housing market.
Key Takeaways:
The median household income in the US is significantly higher than in Canada. For example, in 2021, the median income in the US was about $75,000, compared to $54,000 in Canada.
The average home price in Canada is higher than in the US. In 2022, the average home price in Canada was over $30,000 higher than in the US, despite Canadians having lower median incomes. This makes housing less affordable in Canada compared to the US.
The West Coast of North America, including cities like San Francisco, San Diego, and Vancouver, has some of the least affordable housing markets. In contrast, cities in the Midwest and parts of Canada, like Calgary and Winnipeg, show more favourable affordability compared to their American counterparts.
High migration rates in Canada have driven growth and, subsequently, housing demand, contributing to higher prices. This contrasts with the US, where different regional dynamics and more varied housing markets influence affordability.
Canadian cities like Toronto and Vancouver are less affordable compared to many US cities. For example, Toronto's housing market has a much larger gap between median income affordability and median home prices compared to cities like Dallas, highlighting the severe affordability challenges in Canadian markets.
There's a significant affordability gap between Canadian and American cities, with some Canadian cities like Calgary and Edmonton being more affordable compared to cities like San Francisco and New York. Houston, Texas, is noted as particularly affordable compared to Canadian cities like Kitchener-Waterloo.
Several Canadian cities, including Calgary, Winnipeg, Edmonton, Saskatoon, and St. John, are among the most affordable in North America. This contrasts with some U.S. cities like Columbus, Ohio, where affordability is lower despite the lower home prices.
Cities with younger populations, like Oklahoma City, are seen as more promising for future growth. Investors often consider the youth of a city as a factor in its potential for future development.
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