Rising rates will likely widen wealth inequality: TD chief economist

Rising interest rates are likely going to widen wealth inequality in Canada, as housing affordability hits its worst level in decades, according to Beata Caranci, senior vice-president and chief economist at TD Bank.

In a report released Wednesday, Caranci said there are several factors that affect wealth inequality in Canada but “housing is the single, most important element of the household balance sheet.”

She added that it’s getting even more challenging for low-income Canadians to get into the housing market, as interest rates continue to rise.

“The recent spike in interest rates has lowered home prices and the down payment thresholds, but it has ultimately worsened affordability with higher debt service costs,” Caranci said.