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Is a housing crash an affordability fix?

Some young buyers were cheering for the housing market to crash, but prices are on the rise again. Is a crash still possible - and is the economic damage worth it?
A for sale sign on a house in Toronto.
A for sale sign is pictured in Toronto on Oct. 14, 2021. The Toronto housing market is at record highs according to the UBS Global Real Estate Bubble Index report. (Evan Mitsui/CBC)

As some prospective home buyers watched prices climb to dozens of times their income during the pandemic, they pinned their hopes of ownership on a market crash. 

And for nearly a year starting last April, prices did fall – in Toronto, the average price of a home dropped about 18%. But now, for the last two months, prices have been on the rise again.

So with houses still historically unaffordable, what would it take for Canada's home prices to drop or crash toward affordability, and would the economic damage do more harm than low prices can help? Today, Canadian Center for Policy Alternatives senior economist Marc Lee explains the paths that remain to ownership for the low and middle class.