Canadian Homebuyers Hesitate as Market Chills Ahead of Fall

Homebuyers across Canada demonstrated increased hesitation this summer, influenced by economic uncertainties and changing market dynamics. Experts assert that this trend of buyers feeling apprehensive may extend into the fall season. According to Penelope Graham, a mortgage expert at Ratehub.ca, “It’s been anything but a traditional housing market.”

The looming threat of tariffs from the United States, announced by President Donald Trump, unsettled many Canadians. Graham noted that initial reactions to these tariff threats were marked by anxiety, which contributed to a reluctance to engage in home purchases. Concerns over a potential recession and job losses further compounded this hesitance, leading many would-be buyers to reconsider their decisions.

Before these tariff discussions, forecasts suggested that the housing market would heat up in 2025. Graham mentioned that there had been a significant pent-up demand among buyers, as many had been waiting for interest rates to decrease. Indeed, around 467,100 existing homes are projected to be resold in Canada this year, marking a 3.5 percent decline compared to 2022, according to a recent report by RBC.

Shifts in Buyer Behavior and Market Conditions

This summer’s housing market was characterized by an unusual combination of economic anxiety and increased inventory. Shawn Zigelstein, a broker with Royal LePage, pointed out that buyers had more options available, as many unsold homes lingered on the market longer than typical. He stated that while some buyers have held back, others have opted to withdraw from the buying process altogether.

Experts believe that the current market conditions have allowed buyers a rare opportunity to take their time. “In a regular Toronto market, there’s no time for cold feet,” said Rishard Rameez, CEO of Zown. He highlighted that during the peak of the housing market in 2022, buyers often faced pressure to make quick, unconditional offers. This summer, however, buyers have experienced a more measured approach, allowing them to include conditions such as home inspections and financing clauses.

Rameez shared an example of a couple who initially made an offer on a property that seemed ideal. After a home inspection revealed asbestos, they decided to back out, illustrating how buyers are now more cautious and strategic in their decisions. He also noted that financing conditions have been a significant factor in deals falling through, as even slight fluctuations in price can affect mortgage approval.

Outlook for the Fall Market

Despite the challenges faced this summer, there were signs of recovery in the housing market during the latter half of the season. Graham indicated that the Canadian Real Estate Association (CREA) reported four consecutive months of rising housing sales, suggesting that buyers are becoming more optimistic about entering the market. “Some of that inventory that built up over those quiet months is now starting to be absorbed,” she noted.

Looking ahead, realtors are hopeful for a vibrant fall housing market. RBC economist Robert Hogue suggested that a gradual recovery will likely continue into the second half of the year, potentially leading to stronger demand in 2026. Nevertheless, Graham cautioned that the current average national home price remains over $143,000 lower than in February 2022, a decrease of 17.6 percent.

The ongoing trade tensions and tariff uncertainties also complicate long-term market predictions. Graham emphasized the unpredictability of these factors, stating, “It’s difficult to make a long-term assessment because the headwinds in terms of tariffs and trade wars have not gone away.”

Overall, while the fall may see some improvement compared to the summer, Zigelstein suggested that the market is unlikely to return to typical seasonal numbers. “Do we expect that fall market to increase substantially? I think it will increase over the summer market, but I don’t think we’re going to see typical fall numbers,” he concluded. As the market evolves, many Canadian homebuyers will continue to navigate these complexities with caution and strategic planning.