Rates have dipped in recent months – and may be about to fall further
The Bank of Canada announced it will hold its overnight rate steady at 2.75%, citing continued economic uncertainty and inflation concerns. While the decision may dampen hopes for cheaper borrowing, several underlying trends suggest conditions may still be turning favourable for homebuyers, according to personal finance company NerdWallet.
Though the overnight rate remains unchanged, mortgage rates have gradually declined. Variable mortgage rates hover around 4%—not far from the 10-year average of 3.23%. Fixed rates, meanwhile, have dropped below 4%, with some brokers offering three-year terms at 3.69% and five-year terms at 3.74%.
“If you’re confident your job and income are secure… today’s rates might not be such an impediment,” NerdWallet notes. The easing rates, coupled with growing housing inventory, could give buyers a stronger footing, especially as market listings increase across the country.
Despite recent volatility triggered by the threat of tariffs, housing demand has proven resilient. While national resale activity declined 9.3% year-over-year in March and housing starts fell 12.5%, regional data tells a more nuanced story. British Columbia recorded its highest number of sales since October 2024. In Alberta, most markets outside Calgary and Medicine Hat posted year-over-year gains. Sales in Quebec rose 14% in Q1, while Newfoundland saw a 19.3% jump. Saskatchewan experienced nearly 500 more sales in March compared to January.
“Canadians have clearly not abandoned the idea of buying a home,” according to NerdWallet, highlighting in its report nearly 38,000 homes sold in March—despite rising tariff anxiety.
Barriers to homeownership
Rather than tariffs, high living costs remain the main obstacle to homeownership. According to NerdWallet’s 2025 Canadian Home Buyer Report, 38% of non-homeowners and 26% of homeowners cited cost of living as a barrier, compared to only 13% and 11%, respectively, pointing to economic concerns like tariffs.
With inflation easing—annual inflation fell to 2.3% in March from 2.6% in February—some analysts suggest Canadians may soon feel more confident in their financial outlook. Recent pauses in US-led tariff actions, including a 90-day halt and talk of removing duties on Canadian autos, have further reduced immediate economic threats.
Ultimately, how Canadians perceive the short-term future may shape the market. “The more Canadians that adopt the [positive] perspective,” NerdWallet analysts note, “the more hope there’ll be for the housing market.”
What are your thoughts on the recent analysis of the housing market? Share your insights below.
