National Home Sales Increase 2.8% in June, and Rising Inflation Means Mortgage Costs Unlikely to Come Down

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. 

One Step Forward, Two Steps Back? 

Home sales were up again in July, but you better take a picture quick, because the trend may not last. According to CREA, national home sales increased 2.8% in June compared to May, which also experienced a 3.5% increase over April. The bump was largely driven by the GTA, where sales climbed 17.3% over the last two months, and is largely attributed to a relative calm in the chaos that is the global economy, but the break may have been short-lived. With President Trump threatening fresh tariffs on Canada, home sales could be back on the decline again soon.

A Spring to Forget  

Like the friend who doesn’t know how to paddle, Toronto and Vancouver are adding some dead weight to Canada’s housing market canoe. According to Royal LePage’s Second Quarter Home Price Update and Market Forecast, national aggregate home prices were weighed down by the country’s two biggest markets, where rising inventory and lower demand caused them to drop roughly 3%. By comparison, Montreal saw a 3.5% increase. Prices remained flat or increased in 38 of 64 markets last quarter. Royal LePage attributes the slowdown to economic and political uncertainty and lowered its 2025 national forecast to suggest prices will increase 3.5%.

Rents Continue Downhill  

Canada’s rental market has been trending downward long enough to have a baby. According to the latest Rentals.ca report, the country just experienced its ninth consecutive month of asking rent declines in June, dropping another 2.7% since last year, with the national average now sitting at $2,125. Rents were down in just about every major city from coast to coast, with Calgary rents down nearly 10% since last year. Vancouver also experienced a 6.5% drop, while Toronto saw asking rents decline 5.1%. Rents were up slightly in Saskatchewan and Atlantic Canada but have trended downward in every other province compared to 2024.  

Inflation is Up; Mortgage Costs Likely Won’t Go Down  

Those hoping for a summer interest rate cut are going to have to wait a little longer. That’s because this week Statistics Canada revealed a 1.9% annual increase in consumer prices, up from 1.7% the month before, driven by durable goods like cars and furniture. With prices on the rise, experts say the Bank of Canada is unlikely to take any action that could push inflation higher, like cutting interest rates. The inflation data follows a surprisingly strong jobs report last week, which found that unemployment dropped 0.1% in June. Now, experts say even a September rate cut is unlikely.

Mortgage Renewals Won’t Hit Crisis Levels

Rising mortgage costs are going to strike a blow to Canadian households, but it won’t be a knockout punch. According to a new report by TD bank, Canadians up for renewal are facing higher payments, but not to the extent that was feared earlier in the year. For example, a borrower with a $500,000 mortgage on a 5-year term will likely face $320 in additional monthly mortgage costs, which isn’t great, but not enough to break the bank. Those renewing a shorter-term mortgage, such as a one-year from late 2024 or two-year from 2023, will likely see their costs decline.

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