Toronto may never be considered remotely "affordable" again, but new data indicates that the city's housing market is actually becoming easier for people to break into, even if prices remain high.

Based on January 2024 figures crunched by mortgage site Ratehub.ca, falling interest rates thankfully mean that the income needed to finance a home in various Canadian metropolises has dropped thus far in 2024.

And, though the difference isn't enough to affect things for most residents, any step toward a lower cost of living in the city at this point is a welcome one.

Between December 2023 to last month, the average cost of a house or condo in T.O. fell slightly from $1,067,20 to $1,065,800, a reduction of $1,400, or a meagre 0.13 per cent.

But, in the same time span, the annual salary needed to purchase the typical home here fell from $218,100 to $210,300, a change of $7,800 or 3.6 per cent.

This is all thanks to changes in mortgage lending rates from one month to the next, and especially a lighter stress test, a measure that Ratehub notes has made it "considerably tougher" for Canadians to qualify for a home loan lately. 

The annual household income one would need to be able to afford a home at current prices. Mortgage rates and stress test rates have fallen slightly in markets across the country between December 2023 and January 2024. Chart from Ratehub.ca.

"Affordability improved because interest rates dropped," the firm's experts write in their latest update on real estate affordability in Canada.

"The income required to purchase a home decreased in every city we looked at, and in cities where home prices increased, the drop in interest rates was enough to offset the price increases such that affordability still improved."

Even a small cut to the interest and stress test rates— in this case, 0.45 per cent between December and January for both — can quite substantially improve affordability for buyers, regardless of prices.

Toronto saw the third-largest increase in affordability after Vancouver and Victoria, these three being the most expensive cities in Canada as far as both housing prices and income required to buy a home.

Unfortunately, though the picture looks a little rosier for those in the market for a home, Ratehub says that "this affordability break for buyers could be short-lived" due to increased market activity so far in 2024, especially after such a quiet 2023 overall.

In January, sales spiked 22 per cent nationally compared to the same time last year and outpaced new listings, which is "piling pressure onto an already-scant supply."