OTTAWA - Higher prices and an increase in mortgage rates have made home affordability more of a problem for the average Canadian family, says a new report from the Royal Bank of Canada (TSX:RY).

RBC's latest research on the portion of average household income needed to maintain a home shows that affordability deteriorated over the summer, the second consecutive drop in as many quarters.

The level of deterioration differs from region to region and between types of homes, but for the average bungalow the affordability measure rose 0.7 of a percentage point to 43.3 per cent nationally in the third quarter, after a 0.3-percentage-point gain in the second quarter.

That means the average household would have needed to devote 43.3 per cent of its pre-tax income to service the cost of owning a bungalow at current market values, including mortgage payments, utilities and municipal taxes. The higher the rating, the less affordable a home is to any particular family.

http://ca.news.yahoo.com/rising-prices-mortgage-rates-hits-home-affordability-canada-050618125--finance.html