Lenders and brokers see little relief and no quick housing rebound
The Bank of Canada’s latest decision to hold its policy rate at 2.25% keep borrowing costs steady but does little to revive confidence in Canada’s cooling housing market.
For many front‑line mortgage professionals, the announcement reinforces a view that 2026 will remain subdued, even if rates stay where they are.
Markets largely price in the hold, with policymakers stressing a “wait‑and‑see” stance as they monitor stubborn inflation, elevated oil prices and geopolitical risk.
The Bank said it is “looking through” the immediate impact of the conflict in the Middle East on energy‑driven inflation, while keeping the door open to further moves later in the year.
“Even with rates holding at 2.25% again, we’re not really seeing a change in buyer behaviour,” Joel Fox, COO of Ownright, said.
“People have already adjusted to this rate environment, and activity has remained subdued. In Toronto, where the market used to feel like it was moving nonstop, home sales only rose 1.7% year‑over‑year as of March 2026, while new listings were down 16.7% over the same time period.”
Fox added that while falling prices once drew eager new entrants into the market, homes are now sitting longer as buyers take more time to act, reflecting hesitation driven less by interest rates and more by uncertainty about the economy and future home prices.
The message, delivered in governor Tiff Macklem’s latest opening statement, pointed to a central bank that has moved past the height of its tightening cycle but is not ready to rule out further action in either direction as risks evolve. https://t.co/aPdjFg1KOv
— Canadian Mortgage Professional Magazine (@CMPmagazine) April 29, 2026
Rate pressure and bond markets keep buyers cautious
Penelope Graham, mortgage expert at Ratehub.ca, said the Bank’s stance reflects improving core inflation outside energy but also concern that higher oil prices could spill into broader spending.
“The Bank was clear in its language that it will not let these higher energy prices contaminate other spending categories and allow hotter inflation to become the norm,” she said.
Graham added that five‑year Government of Canada bond yields has sat in roughly the 3.1% range since mid‑March, pushing lenders to raise fixed mortgage rates by 25–40 basis points in recent weeks.
Spring market stayed selective, not surging
From a housing‑market perspective, brokers report more hesitation than pent‑up demand.
“This hold is unlikely to jump start the housing market, though there are significant opportunities for buyers who are ready to purchase,” Victor Tran, mortgage and real estate expert at Rates.ca, said.
Leah Zlatkin, a licensed broker and expert at LowestRates.ca, said the rate hold has offered psychological reassurance but not enough to change the trajectory of the spring market.
“Today’s rate hold gives borrowers some reassurance that things are not getting worse in the immediate term, but it’s not the kind of change that suddenly brings a wave of buyers back into the market,” she said.
“People are still shopping, and those who need to buy will buy, but many are not finding the right property, and for others, mortgage rates still feel too high to justify making a move right now.”
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
