Buying a house? Your family needs to make $114,000 a year.

Buying the average B.C. home this month requires $21,150 more in annual income than it did at the start of the year, according to the B.C. Real Estate Association.

That means a family would need to earn an income of $114,000 to qualify for a mortgage to buy the average $454,945 B.C. home at the current, posted five-year mortgage rate of 7.24 per cent, according to Cameron Muir, B.C. Real Estate Association chief economist.

The monthly payment on that mortgage would be $2,987.

The average family income was around $65,000 in 2005, according to the latest figures available from Statistics Canada.

That monthly payment assumes a mortgage with a 10-per-cent down payment and a 25-year amortization, and is now $516 more than it would have been in January, Muir added.

Prices that have risen an average 12 per cent over the last year are partly to blame, but rising mortgage rates "are the lion's share" of the problem.

"Certainly the combination of record-high home prices with recent elevations in mortgage rates is going to impact [housing] affordability," Muir said.

That means more people can't afford to buy in B.C.'s high-priced markets, which Muir said will serve to slow sales and price growth.

The term economists use to describe slowing sales is moderation, and Muir said "the recent uptick in mortgage rates is going to operate to moderate the market a little bit more quickly than it had been doing as a result of rising prices."

The B.C. Real Estate Association counted 11,683 Multiple-Listing-Service-recorded home sales in May, which is three per cent more than the same month a year ago, Muir said, and the highest number ever recorded.

Posted mortgage rates have been on the rise due to inflation fears. The five-year fixed-rate of the major banks hit a high of 7.44 last week from an average of 6.64 per cent in April. The rate dropped to 7.24 per cent Tuesday, but is expected to go up again in July when the Bank of Canada is expected to raise its key overnight lending rate to combat inflation, and may go up again in September.

Christina Pughe, a mortgage development manager at Vancity credit union, said the best interest rate brokers can get for clients today is 5.79 per cent for a five-year, fixed-rate. Six weeks ago, that rate was 5.09 per cent.

"[The market] is very frantic right now," Pughe said. "Anybody who had a pre-approval is jumping now and buying property trying to keep their guaranteed rates."

Kyle Liu is one of Pughe's clients who, with his wife Jenny, was able to jump in and buy a home in North Burnaby for under $460,000 while keeping a 5.1-per-cent mortgage rate.

Liu, a power line technician, added that Greater Vancouver's high prices worried him more than current interest rates, which he finds "fairly reasonable."

"There is always the fear that if your mortgage is too big and rates go up a point or two, you could be in big trouble," he added.

For him and his wife, however, there is a sense of relief from having gotten into the market when they did. "I feel for the people trying to get in again now."

Tsur Somerville, director of the centre for urban economics and real estate at the Sauder School of Business at the University of B.C., said high prices and rising interest rates will hurt the market, but how much depends on what else is going on in the market.

With rising employment and incomes in the province, he added that he can't foresee small changes in mortgage rates hurting markets that much.

(prepared by Derrick Penner/Vancouver Sun)