Housing affordability in Canada`s large urban centers improved in the third quarter of 2020, a second improvement in a row. Higher incomes helped in Q3, but the largest portion of the improvement came in the form of lower interest rates. Indeed, our 5-year mortgage benchmark rate declined 43 basis points in the quarter, driven by central bank easing and improving financial conditions. Combined, income and mortgage rates were more than enough to offset the slight increase in home prices. Our benchmark rate experienced a 62 basis point decline since the start of the pandemic, but that was the second leg of a decline that started in early 2019. As a result, affordability improved substantially in Canada with Toronto, Montreal and Vancouver being now the cheapest since 2016 and the Calgary market being the least expensive on record. It should come as no surprise that such a context helped keep the housing market afloat during the pandemic. Looking ahead, despite rising home prices, affordability is set to improve in the fourth quarter as homebuyers have enjoyed a further decline in mortgage interest rates (25 basis point so far). Will the improvement in affordability be enough to avoid a marked slowdown in the housing market in 2021? With extraordinary government support to household income phasing out and payment deferrals not at play in 2021, the housing market is facing some headwinds given the still recovering labour market. Immigration could also continue to run below targets which would translate into lower household formation than previously thought.