Homebuyers Retreat to the Sidelines, and The Big Banks Cut Mortgage Rates

This week’s top real estate stories.

By  Jared Lindzon | 2 minute read

Every Friday, Wahi brings you the most important real estate stories from the past week. 

Trump Pushes Canadian Homebuyers to the Sidelines

Canadians may be buying local amid the ongoing trade war, but they’re not buying homes. According to a new report by CREA, home sales took a dive in February along with hundreds of years of strong cross-border relations, falling 10% compared to January. That marks the slowest month the market has seen since November 2023, and the biggest monthly drop since May 2022. The report notes that home sales started to decline when the latest tariffs were announced in late January, and never recovered, putting a damper on what many had hoped would be a spring recovery. 

Home Construction Slows, Again

Homebuying isn’t the only recovery that got delayed by the trade war as builders are forced to keep waiting on that market rebound they were hoping for in 2025. The Canada Mortgage and Housing Corporation reported that housing starts in February dropped 4% compared to January — 5% in areas with 10,000 or more residents. The decline in construction, however, was most dramatic in Canada’s biggest cities, falling 6% in Montreal, 48% in Vancouver and 68% in Toronto last month compared to February of 2024. Overall, construction was down 17% in areas with over 10,000 residents since last year.

What Canadians Really Want

Like a certain ‘90s British girl band, we asked Canadians to tell us what they want (what they really, really want) in a home. According to Wahi’s 2025 What Homeseekers Want survey, the most popular feature isn’t inside the house at all, with 81% saying a backyard is “important” or “very important.” Canadians also prioritized a newly renovated bathroom or kitchen, and house hunters also wanted a finished basement, followed by a garage. Among the 24% who prefer a condo or apartment, meanwhile, a new kitchen or bathroom also takes top priority, followed by a designated parking spot, and visitor parking.

The Inflation Game Goes into Overtime

Like skinny jeans and power suits, inflation is unfortunately making a big comeback in 2025. After dropping below 2% in October, and staying there through January, Statistics Canada announced this week that the Consumer Price index jumped to 2.6% in February. That is despite the tax holiday that continued through mid-month, which the agency says would have otherwise seen prices up 3% compared to last February. Higher travel costs and gas prices also contributed to a concerning increase in prices. Experts say the unexpected jump in costs leaves the Bank of Canada with no clear direction for setting interest rates.

The Weather is Heating Up — So is Mortgage Rate Competition

Spring has officially arrived, bringing warmer weather, flowers, allergies, and some fierce competition between mortgage lenders — trade war be damned. In recent days the big banks have been slashing rates across a range of mortgage products in hopes of snatching a larger share of what is likely to be a relatively small spring buyer pool. RBC led the way with across-the-board cuts as deep as 0.65%, while TD and BMO have lowered borrowing costs twice in the last two weeks. Now most major lenders are offering five-year fixed rates below 4% for those with a downpayment of 20% or more.

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