Canadian national home sales were up 3.6% month-over-month.

Global Tariff Uncertainty Sidelines Buyers

Canadian existing home sales recorded over the MLS Systems climbed 3.6% between April and May, a normally strong month for housing, marking the first gain in activity since last November.

The Greater Toronto Area (GTA), Calgary, and Ottawa led the monthly increase.

“May 2025 not only saw home sales move higher at the national level for the first time in more than six months, but prices at the national level also stopped falling,” said Shaun Cathcart, CREA’s Senior Economist. “It’s only one month of data, and one car doesn’t make a parade, but there is a sense that maybe the expected turnaround in housing activity this year was just delayed for a few months by the initial tariff chaos and uncertainty.”

New Listings

New supply declined by 1% month-over-month in April. Combined with flat sales, the national sales-to-new listings ratio climbed to 46.8% compared to 46.4% in March. The long-term average for the national sales-to-new listings ratio is 54.9%, with readings between 45% and 65% generally consistent with balanced housing market conditions.

At the end of April 2025, 183,000 properties were listed for sale on all Canadian MLS® Systems, up 14.3% from a year earlier but still below the long-term average of around 201,000 listings.

“The number of homes for sale across Canada has almost returned to normal, but that is the result of higher inventories in B.C. and Ontario, and tight inventories everywhere else,” said Valérie Paquin, CREA Chair.

There were 5.1 months of inventory on a national basis at the end of April 2025, which is in line with the long-term average of five months. Based on one standard deviation above and below that long-term average, a seller’s market would be below 3.6 months and a buyer’s market above 6.4 months.

New supply rose by 3.1% month-over-month in May. Given a similar increase in sales activity, the national sales-to-new listings ratio was 47%, almost unchanged from 46.8% in April. The long-term average for the national sales-to-new listings ratio is 54.9%, with readings between 45% and 65% generally consistent with balanced housing market conditions.

At the end of May 2025, 201,880 properties were listed for sale on all Canadian MLS® Systems, up 13.2% from a year earlier but remaining about 5% below the long-term average of around 211,500 listings for the month.

“May saw an increased number of new listings hitting the market early in the month, followed by a higher number of transactions in the second half of the month, so overall more sellers and buyers compared to April,” said Valérie Paquin, CREA Chair. “It seems like this may carry over into June as well.”

There were 4.9 months of inventory nationally at the end of May 2025, near the long-term average of five months. Based on one standard deviation above and below that long-term average, a seller’s market would be below 3.6 months, and a buyer’s market would be above 6.4 months.

Home Prices

The National Composite MLS® Home Price Index (HPI) was relatively unchanged (-0.2%) from April to May 2025. The pause follows three straight month-over-month declines of closer to 1%. The non-seasonally adjusted National Composite MLS® HPI was down 3.5% compared to May 2024.

Bottom Line

The First-Time Homebuyers GST Rebate on newly built homes took effect for purchase agreements dated on or after May 27. This may bring some additional buyers into sales offices, but it’ll be a while before those projects break ground and show up in the housing starts statistics.

In the resale market, May saw the first signs of optimism in home sales in six months, but sales remain at the low end of seasonal norms. While trade war uncertainty still looms, average and benchmark prices have fallen to about 17% below their early 2022 peaks. The opportunity may have been too good for some buyers to pass up.

New listings picked up about 3% from April, while inventory held steady at nearly five months. With this excess supply in the market, average sale prices ticked up only slightly in May but remain flat over the past year, while the benchmark price declined marginally.

Regional differences remained significant. Home sales reversed course in Quebec City, but the average selling price increased, reaching a new high. Despite stronger sales in Toronto and Vancouver, these cities remained deep in buyer’s market territory.

While one good month of home sales doesn’t make a trend, there may be signs of cautious optimism for the resale market for those buyers who remain little affected by the ongoing trade war. The combination of lower prices, more inventory and less economic uncertainty should continue to entice more homebuyers back into the market this summer. This would be more likely if the Bank of Canada cuts rates again, which could well happen in July if the inflation readings improve, especially for core inflation.

Written by DLC Chief Economist Dr Sherry Cooper

Starting Points & Strategies

What, Who, How, Why

What is a Reverse Mortgage?

A loan secured against the value of a homeowner’s principal residence.

Who qualifies for a Reverse Mortgage?

Homeowners age 55 or older who live in their primary residence and has a low mortgage balance or is mortgage-free.  A homeowner can apply for a Reverse Mortgage with the help of a mortgage broker, as well as a lawyer who can review the terms of the Reverse Mortgage and clarify how it will affect their heirs and estate planning.

How does a homeowner qualify for a Reverse Mortgage?

There is no need to qualify by debt service ratios or income level, additionally, Reverse Mortgages will not impact pension payments.  Furthermore, the funds withdrawn are tax-free and the homeowner maintains ownership of the home.

Up to 55% of the home equity can be accessed.

No monthly payments are required; however, optional interest payments can be made.

Why would a homeowner want a Reverse Mortgage?

These are the different Strategies that can be used with a Reverse Mortgage:

• First time home buyer – gift from grandparents/parents – help adult kids to purchase home without touching savings of grandparents/parents
• Living inheritance, tuition gifts to family members
• Debt consolidation
• Monthly income
• Renovations
• Divorce/separation – use equity to buy second home for other spouse so can wait for good time to sell, no rush to sell immediately
• Down-sizing – use equity for downpayment to avoid having to use “condition to sale of home”. Allows for time to transition into a new home.
• Proactive down-sizing – Purchase down-size property now, rent out until ready to downsize. Use rental income for vacations, etc.
• Purchase investment property, vacation home, able to purchase a “unique property, rural property, remote location” more easily

**Using Reverse Mortgage funds for investing means interest is tax-deductible

Written by Kim Franz

Refinancing Your Mortgage in 2025.

Refinancing your mortgage can be a smart financial move for many reasons, and as your trusted mortgage advisor, I’ve seen how much it can benefit homeowners!

Ideally, refinancing is done at the end of your mortgage term to avoid penalties, but the timing can vary depending on your goals. For some, it’s about unlocking the equity in their home to fund renovations or cover big expenses like college tuition. For others, it’s an opportunity to consolidate debt, lower their interest rate, or change up their mortgage product.

Let’s take a closer look at some of the ways refinancing your mortgage can help!

• Get a Better Rate: As interest rates have continued to decrease with the Bank of Canada updates these past few months, now is a great time to consider refinancing for a better rate and lower overall mortgage payments!  Experts anticipate the Bank of Canada will move to have the overnight rate down to 4.0% at year-end and potentially down to 2.75% for 2025.
• Consolidate Debt: When it comes to renewal season and considering a refinance, this is a great time to review your existing debt and determine whether or not you want to consolidate it onto your mortgage. In most cases, the interest rate on your mortgage is less than you would be charged with credit card companies or other forms of financing you may have. Plus, having all your debt consolidated into a single payment can keep you on track!
• Unlock Your Home Equity: Do you have projects around the house you’ve been dying to get started on? Need funds for a large purchase such as a new vehicle or post-secondary education? When you are looking to renew your mortgage, it is a great opportunity to consider refinancing in order to take advantage of the home equity you have built up to help with these larger changes in your life!
• Change Your Mortgage Product: Are you unhappy with your existing mortgage product? If you have a variable-rate or adjustable-rate mortgage, you may be considering locking it in at the lower rates. Alternatively, you may want to switch your current fixed-rate mortgage to a variable option with the interest rates expected to continue decreasing into 2025. You can also utilize your refinance to take advantage of a different payment or amortization schedule to help pay off your mortgage faster!

PLUS! Some latest changes by the Government of Canada will make it even easier for you when it comes to your renewal and refinancing options:

• Those of you who may have an uninsured mortgage will no longer have to pass the stress test as of November 21st. This means that you have more flexibility when it comes to rates and mortgage products in renewal cases where you wish to switch lenders without adding additional funds to your mortgage!
• Beginning January 15, the federal government will allow default-insured mortgages to be refinanced to build a secondary suite. If you’ve been considering adding a suite to your property, you may be eligible to access up to 90% of your home’s equity for this purpose.

Written by my DLC Marketing Team