National housing trends

Sales Trend Snapshot (2025)

• Through late 2025, national home sales activity has largely flattened after summer gains, with modest month-to-month shifts and a general “holding pattern” into winter.
• Inventory has been elevated compared to prior years, and many markets have shown year-over-year sales declines in late 2025 amid price moderation and higher supply.

Regional Housing Market Highlights

Atlantic Canada

New Brunswick

New Brunswick saw moderate price growth year-over-year, keeping it competitive within the Atlantic region.

Ontario province more broadly

Data for November 2025 showed average home prices down year-over-year and notable declines in sales volumes compared with October — indicating a broader softening market in Ontario outside Toronto as well.

Prairies (Alberta, Saskatchewan, Manitoba)

Manitoba

While specific end-of-2025 resale data for Manitoba wasn’t widely reported, broader construction and housing start data show significant activity in cities like Winnipeg and surrounding areas — supporting steady relative performance in resale markets compared with hotter or softer markets elsewhere.

British Columbia (BC)

Other BC markets

Smaller metro and commuter markets often show mixed performance, with some more affordable communities seeing relative resilience even as the core Vancouver market cools. (Industry analysis highlights divergence within the province, though precise late-year stats vary by board.)

Mortgage Rate Trends

Bank of Canada Rate

The Bank of Canada held its overnight policy rate at 2.25% in December 2025, with the Bank Rate at 2.5% and the deposit rate at 2.2%, reflecting continued policy stability at historically low levels.

Mortgage Rates

A. 5-Year Fixed Mortgage Rates (Canada)

As of December 31 2025:

Average 5-Year Fixed Conventional Rate: ~4.71%

• This reflects a decline from earlier in the year but remains above 4%.

Broader average mortgage rates (Dec 2025):

• 2-Year Fixed: ~4.88%
• 3-Year Fixed: ~4.69%
• 5-Year Fixed: ~4.71%
• Variable (5-Year): ~4.28%

(These are national averages and may vary by lender)

Trend Notes:

• After falling earlier in 2025 alongside Bank of Canada cuts, some lenders have raised posted mortgage rates back above 4% due to higher long-term bond yields and stronger economic data.
• Variable-rate mortgages remain tied to the prime rate (which moves with the Bank of Canada policy rate), so with the 2.25% overnight, prime is currently near ~4.45%.

B. Variable / Prime-Based Rates

• 5-Year Variable Rate mortgages — ~4.28% (national average) as of late Dec 2025.
• Variable products typically discount from prime; however, variable rates have risen with long-term yield pressures and banks adjusting spreads.

Price Forecast

Mortgage Rate Forecast (5-Year)

• Fixed mortgage rates tend to follow bond yields plus a spread, so If 5-year Government yields stay elevated (~2.8–3.0%), then fixed mortgage rates could remain around ~4.5–5.0% in the near term.

• Variable rates depend on prime movements; if the BoC holds, variable rates may stay stable or modestly lower if discounting increases.

Economic Indicators

GDP Growth

Summary — GDP Growth

• Q1 2025: ~2.2% annualized growth.
• Q3 2025: ~0.6% quarter-over-quarter growth (signal of recovery after mid-year weakness).
• Annual forecast: ~1.4–1.8% trend growth expected for 2025 overall.

Interpretation: Growth remains positive but below historical highs, reflecting slowing global demand, trade uncertainty, and monetary policy effects.

Inflations

Recent inflation trend

• Bank of Canada forecasts and market data over 2025 showed inflation tracking close to its 2% target, with inflation expectations roughly: ~2.0–2.3% on average for 2025 under BoC projections.
• This reflects core inflation pressures gradually normalizing after elevated price levels in prior years.

Implication: Inflation near target reduced the urgency for further aggressive rate hikes, influencing the Bank of Canada’s decision to cut and then hold rates in late 2025.

Housing Inventory

Key housing inventory indicators (late 2025)

• Inventory levels (MLS® listings): ~173,000 properties listed across Canadian MLS® systems toward Nov/Dec 2025, up roughly 8.5% year-over-year but still slightly below the long-term average for that time of year.
• Months of inventory: Canada’s months-of-supply hovered at around 4.4 months, a balanced market metric close to historical norms.
• ⁠Active listings had remained stable through late 2025, indicating that supply pressures had not sharply loosened nor tightened — consistent with balanced market conditions nationally.

Interpretation: Although inventory was up annually, the supply remains fairly restrained in relation to demand — with ~4.4 months of inventory typically suggesting a balanced housing market (not strongly favoring buyers or sellers).

Bond & Mortgage Market Rates — End of December 2025

5-Year Government of Canada Bond Yield (Last Trading Day Approx.)

• Government of Canada 5-Year Benchmark Bond Yield (Dec 31, 2025): ~2.96% (mid-market/benchmark yield).

This yield represents the approximate closing market yield at the very end of December 2025, and is a widely referenced benchmark for longer-term interest rates and fixed mortgage pricing.

5-Year Canadian Mortgage Bond (CMB) Yield

There isn’t a regularly published official daily CMB yield series easily available in public datasets the way Government of Canada yields are, but we can approximate based on:

Government reporting on Canada Mortgage Bonds shows recent 5-year CMB issuance averaging yields near ~2.9–3.1% in late 2025 auctions (CMB issuance for a 5-year tranche showed yields in that range in mid-December).

Approximate 5-Year CMB Yield (Dec 2025): ~3.0% (approximate market level, since CMBs usually trade ~0.1–0.3% above Government of Canada yields depending on liquidity and credit spreads).