Here’s a quick breakdown of key economic trends in Canada and the U.S. — and what they mean for the Canadian housing market.

Canada’s Economy vs. U.S.

The Canadian economy is more sensitive to interest rates, which has led to a sharper slowdown compared to the U.S. The jobless rate in Canada has climbed to 6.5%, while job vacancies have dropped significantly.

Meanwhile, wage inflation remains at 4.9%, but with more available workers, wages are expected to decrease.

Inflation and Rate Cuts

Canada's inflation rate hit 2% in October, up from 1.6% in September. While another 50 bps rate cut is less likely, a 25 bps cut is expected soon.

Interest rates in Canada are lower than in the U.S., which is helping the housing market recover faster.

 Impact on the Housing Market

The Canadian housing market saw a boost in activity in October and early November. New listings surged, offering buyers more options, while lower interest rates made it easier to purchase homes.

Variable mortgage rates (linked to the prime rate) are expected to drop further as the Bank of Canada continues to cut rates.

Bank of Canada’s Next Moves

Expect the BoC to keep cutting rates at every meeting until mid-2025, reducing the policy rate to around 2.25% - 1.75%.

This could trigger a strong spring housing season, as buyers re-enter the market and sellers feel more confident listing their homes.

What’s Next for Canadian Real Estate?

There’s a lot of pent-up demand in the housing market. Buyers have been waiting for lower interest rates, and sellers have been holding back.

With every rate cut, economic activity is picking up — especially in the housing sector , which is highly interest-sensitive.

Ready to make your move? The market is starting to turn around!