Housing Market Check-in: This Year's Busy Season May Be Slower

As the housing market enters its traditional busy season, early indicators suggest that this year's activity may not reach the heights of previous years. A combination of factors, including rising mortgage rates, affordability challenges, and economic uncertainty, is casting a shadow over the market's outlook. Let's delve into the key trends and expert insights that paint a picture of a potentially slower busy season ahead.



Mortgage rates have been on an upward trajectory, with the average 30-year fixed-rate mortgage ranging from 6.08% to 7.44% over the past 52 weeks. This increase in mortgage rates has made homeownership less affordable, particularly for first-time buyers. According to Freddie Mac, the average 30-year fixed-rate mortgage has ranged from 6.08% to 7.44% over the past 52 weeks. Higher mortgage rates have made homeownership less affordable, particularly for first-time buyers.

Despite affordability challenges, buyer demand has remained resilient, driven by factors such as job growth, population growth, and pent-up demand. However, pending home sales, a leading indicator of future closings, have been relatively flat or declining in recent months. This suggests that the market may not experience the typical seasonal boost in sales during the busy season.



Inventory levels have been increasing, providing more options for buyers. However, this increase in inventory may indicate a slowdown in sales activity, as buyers have more time to consider their purchases. A higher inventory means there are more options for buyers, which could lead to more cautious decision-making and slower sales.



Economic uncertainty, particularly surrounding the ongoing trade war with the United States and reduced immigration targets, poses significant risks to the housing market. Consumers may be more cautious about making large purchases like homes when the economic outlook is uncertain. This uncertainty could dampen demand for housing and slow down the market's recovery.

Regionally, the housing market's performance is expected to vary. In Ontario, particularly in the Greater Toronto Area, Hamilton, Kitchener, Cambridge, and Waterloo, the condominium market is expected to slow down due to lower investor interest, more young families looking for family-friendly homes, and higher interest rates pushing down demand. In contrast, British Columbia, particularly in Vancouver and Victoria, is expected to see a "small recovery" in ground-oriented homes, including detached and semi-detached houses, due to their affordability compared to condominiums and the region's economic conditions.



In conclusion, the housing market's busy season this year may be slower than in previous years, with a combination of factors such as rising mortgage rates, affordability challenges, and economic uncertainty casting a shadow over the market's outlook. While buyer demand has remained resilient, pending home sales and inventory levels suggest a potential slowdown in sales activity. Regionally, the housing market's performance is expected to vary, with some areas experiencing a recovery in housing starts while others may continue to face challenges. As the market navigates these headwinds, it will be crucial for buyers, sellers, and investors to stay informed and adapt to the evolving landscape.