For some, now is the perfect time to buy. Others are still struggling
Hopeful first-time homebuyers looked on in dismay during the COVID-19 pandemic as prices shot through the roof across many regions and bidding wars locked them out of the market.
But while a pronounced housing and mortgage market slowdown since 2022 has seen activity cool and prices slip, the jury is still out on whether doors are opening again for new buyers.
Homebuying remained muted across Canada in June despite a slight month-over-month pickup, but RE/MAX Canada area vice president Kingsley Ma (pictured top) told Canadian Mortgage Professional prospects are improving for first-time buyers who no longer have to contend with multiple offers, and rising bids, on the property they want.
“There are lots of opportunities. In fact, for first-time homebuyers, I think this time right around now is the best time to buy, because interest rates are still very moderate and lower than [last year],” he said.
“And there are lots of products out there for them to choose from. When the market’s hot, you don’t have the opportunity to take your time to assess what you really want. But now in this market, they do – and borrowing costs are still relatively healthy. They have the opportunity to negotiate on the deal.”
While rates are down, affordability remains out of reach for many
The Bank of Canada’s benchmark rate has fallen by 225 basis points since the opening months of 2024 thanks to a flurry of rate cuts throughout last year and in the opening months of 2025 – although the central bank has left rates unchanged in its last two meetings.
Five-year Government of Canada bond yields, which lead fixed mortgage rates in Canada, are also lower than the same time last year, despite a recent uptick tied to a new trade war escalation by US president Donald Trump.
Still, plenty of struggles remain for first-time buyers. Those who find themselves in a position to purchase, with enough saved up for a downpayment, will likely enjoy more choice and a calmer buying environment.
For others striving to put away enough money for a deposit, the outlook remains gloomy. While the MLS Home Price Index (HPI) fell 3.7% in June compared with the same time last year, Ratehub.ca’s latest mortgage market study showed that housing affordability deteriorated in 12 of 13 major markets last month, partly due to a slight uptick in the average mortgage stress test rate on a typical five-year fixed mortgage.
Toronto was the only market where affordability improved – and buyers will still have to shell out a cool $995,100 to buy the average home in the city, Ratehub said.
Housing market activity posted another mild recent uptick across Canada, according to the Canadian Real Estate Association (CREA) – although the pace of home sales and price growth isn’t exactly consistent from one market to the next.https://t.co/mJJV46yqcE
— Canadian Mortgage Professional Magazine (@CMPmagazine) July 22, 2025
More 2025 rate cuts not a surefire thing
Some buyers are also holding off making a move in the current market in the expectation that rates will move lower by the end of the year, with central bank cuts potentially still in the cards for the final quarter of 2025.
But inflation came in hotter than expected last month, and a resilient labour market has also fuelled speculation that the Bank could keep rate cuts on ice for the foreseeable future.
Its next decision is set to arrive on July 30, with virtually no chance of a cut at that meeting. While most of Canada’s top banks still expect cuts before the end of the year, Royal Bank of Canada (RBC) and Scotiabank both believe no further reductions are on the way until 2026.
What’s more, fixed rates face an uncertain path ahead with no sign yet of a US-Canada trade deal to end the tariff war that’s plunged the Canadian economy into turmoil this year.
All that means buyers shouldn’t count on rates nosediving anytime soon, according to Ma – meaning for those who are ready to enter the market but holding off, now is the time to take the plunge.
“I don’t think we’ll see a lot of interest rate [activity] from here onwards,” he said. “If anything, it’ll be very minimal, maybe a quarter between now and the end of the year. But I have a feeling it’s just going to stay pretty flat in terms of interest rates.”
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