Amid ongoing tariff negotiations and market volatility, Canadian real estate spring trends have been defined by uncertainty. In April, the Canadian Real Estate Association (CREA) made the largest revision to their housing forecast since the 2008 financial crisis: after predicting an 8.6% increase in home sales in January, they adjusted this forecast down to a 0.02% decline in April.
The national average home price is expected to fall 0.3% to $687,898 this year—nearly $30,000 below earlier estimates. Modest price declines are anticipated in Ontario and British Columbia, while forecasted gains in other provinces have been revised downward to the 3%–5% range.
With the Bank of Canada deep into a rate-cut cycle, 2025 will likely see further easing and a new wave of refinancing. However, a recent uptick in buyer activity could signal a stronger Canadian housing market forecast than expected in the coming months. As we head into the second half of the year, staying attuned to these shifts – and anticipating how they will impact borrower needs – will be key to helping you connect clients with the right solutions. In doing so, you’ll be positioning yourself for success in a rapidly evolving market.
What were the homebuying trends this spring?
Toronto is often a focal point for market headlines, and May marked one of its worst months on record with a 4.5% YoY decline in average sale prices. Mississauga fared even worse, with average sale prices falling by 5% since last May. But real estate trends elsewhere in Canada told a different story.
While national metrics showed a general decline early in the year, overall sales across Canada stabilized in the spring with significant regional variations in average sale prices. For example, the average price of homes rose by 7.9% YoY in Montréal, and homes in Chilliwack saw a 2.8% increase. Markets in Ottawa, Winnipeg, and Saskatoon were also trending upward, presenting regional opportunities that defy national statistics.
Overall, the 3.6% rise in national sales from April to May might be an early indicator of a resurgence in buyer confidence after tariffs threatened economic stability. As CREA Senior Economist Shaun Cathcart noted, “It’s only one month of data, and one car doesn’t make a parade, but there is a sense that maybe the expected turnaround in housing activity this year was just delayed for a few months by the initial tariff chaos and uncertainty.”
For borrowers securing financing, rate trends have also been volatile; throughout the spring, five-year fixed rates fell to 3.89% but began rising again in May as many lenders pulled back from aggressive pricing. Variable rates rose through spring as lenders reduced discounts in anticipation of rate cuts in late 2025, creating a lending market with pockets of opportunity for savvy borrowers.
As rates continue to shift, 28% of borrowers are switching lenders to shop for favorable rates. Canada will also see a new wave of refinancing as 60% of outstanding Canadian mortgages will renew in 2025 or 2026, and many first-time borrowers are entering the market. Brokers will need to keep a close eye on market trends to secure the best financing opportunities for their clients, whether they’re making financial adjustments or eyeing their first home.
Canadian housing market forecast
Ongoing trade tensions have made the housing market forecast more uncertain for the last half of 2025. In April, CREA warned that its current outlook carries an “unprecedented level of uncertainty” due to persistent trade risks and the potential for stagflation – a troubling combination of rising inflation and increasing unemployment.
This economic uncertainty creates a challenge for both brokers and borrowers, as stagflation can lead to more volatile rate movements and unpredictable lending conditions through the remainder of the year. However, more affordable housing could trigger a rebound in the market, creating unique opportunities for borrowers and brokers alike.
An influx of new buyers is changing the lending landscape
The market’s growing inventory and lower borrowing costs are creating an influx of millennial and first-time buyers who are changing the competitive landscape for mortgage products. These buyers have different financial profiles compared to previous generations, as the rising gig economy and shifting market conditions create less predictable incomes.
At the same time, Big 6 banks are building their credit reserves and tightening lending criteria, particularly for self-employed borrowers in tariff-impacted industries such as steel and aluminum. Alt-A lenders and private credit providers continue to capture market share as more borrowers struggle to access traditional financing.
The housing market may rebound
While 2025 will likely continue to see further rate cuts and slower movement, CMHC anticipates more activity in 2026 and 2027 as housing becomes more affordable for first-time buyers. By the end of the year, TD and RBC expect fixed rates to stabilize at 3.5-4%, creating the potential for long-term savings for borrowers who time their financing strategically.
However, this forecast will depend on developments in US tariff and immigration policies that could impact Canada’s housing sector. CMHC notes that higher tariffs could create a low-growth scenario that leads to weaker demand until 2026, while stronger economic conditions could push both home prices and productivity up, making ownership more accessible.
Adjusting your brokerage strategy
A new wave of refinancing represents a massive client acquisition opportunity, and brokers who prepare now can strengthen existing relationships and expand their client base. The oncoming transition period is also an opportunity for brokers to help borrowers navigate market complexity and position themselves as trusted advisors to first-time buyers.
Track market changes to secure better renewals
In 2025, 1.2 million fixed-rate mortgages will be up for renewal––and CMHC reports that 85% of them were signed during the pandemic when rates were at or below 1%. Most of these borrowers will face mortgage renewal shock due to significant rate increases, particularly at a time when many households are struggling with rising debt.
In a shifting rate environment, early outreach is key. Volatile market conditions can create windows of opportunity, and by proactively connecting with clients ahead of their renewal date and having a clear strategy in place, you can help them explore their options, act with confidence, and potentially secure a better rate.
Watch for regulatory shifts that affect access to traditional lending
After introducing a loan-to-income cap for federally regulated lenders in January, OSFI is evaluating whether this cap could become an alternative to stress tests for borrowers. The new system places limits on the number of high-risk mortgages (debt over 450% of income) that lenders can approve––and if it becomes a full replacement for stress tests, it will change how risk is managed in the mortgage market.
While borrowers who previously fell short of stress tests might find easier access to traditional financing, others who exceed the loan-to-income thresholds may find it harder to qualify for mortgages. OSFI will make a final decision by the end of the year; in the meantime, maintaining relationships with lenders who can serve borrowers across the risk spectrum will be increasingly important.
Support clients with alternatives to traditional financing
As more new buyers enter a volatile market and borrowers hit a “mortgage renewal cliff,” brokers will need a strategic toolkit that looks beyond traditional financing.
First-time buyers will need more strategies to maximize their purchasing power, as high debt-to-income ratios make mortgage qualification a challenge. Tools like RRSP Home Buyer’s Plan withdrawals can help them access tax-free withdrawals for a down payment on their first home, giving them a crucial edge in a volatile market.
During renewal season, brokers can help clients navigate economic uncertainty with strategies for creating a strong financial foundation. This can include advice on reducing debt and saving for a downpayment, as well as partnerships with MICs and private lenders that allow you to expand your offerings to clients with complex finances.
Get ready for renewal season
Brokers who recalibrate now can ride the refinancing wave expected through Q4-2025. Changing rates, evolving regulations, and diverse borrower needs are adding complexity but also creating new opportunities for those who stay ahead of market trends. Whether you’re guiding first-time buyers through their options or helping existing clients manage rate changes, your expertise can help clients make informed decisions that have a positive impact on their financial lives for years to come.
CMI is your trusted private lending partner for flexible and creative mortgage solutions that meet clients where they are. Book a call with us today to explore mortgage solutions that give your clients the freedom to choose their best financial future.
