Rates We Have Not Seen Since March 2022
Mortgage alphabet
The Canadian Real Estate Association (CREA) reports that home sales rose 6.6% in July compared to a year ago, continuing the upward trend following the market slowdown seen in previous months. In all, 45,973 homes changed hands last month, compared to 43,122 in July 2024.
On a month-over-month basis, home sales rose 3.8% compared to June, with transaction volume up a cumulative 11.2% since March. "With sales posting their fourth consecutive month of growth in July, and by nearly four percent, the long-awaited recovery in the housing market after a prolonged inflation-driven downturn appears to have finally arrived," said CREA senior economist Shaun Cathcart in a press release. "Looking a bit further ahead, it'll be interesting to see how buyers respond to the surge in new listings that typically shows up in the first half of September."
According to the association, the rise in sales was overwhelmingly driven by the Greater Toronto Area, where transaction volume has recovered a cumulative 35.5% since March.
TD economist Rishi Sondhi said that "pent-up demand, which had temporarily stepped aside earlier this year, began actively returning to the market last month." "It really does look like the sales recovery that should have happened earlier in the year, following the significant rate cuts of 2024, was simply pushed back by a few months," his note states. "Some easing of economic uncertainty should bring more buyers back to the market in British Columbia and Ontario, while further easing of Bank of Canada monetary policy could provide a modest boost in the second half of the year. That said, barriers remain, including weak housing affordability in several provinces and a softer labour market."
Home sales in many markets dropped sharply following the start of the Canada-US trade dispute that began earlier this year. Real estate market analysts pointed to considerable economic uncertainty tied to both US tariffs on Canadian goods and the effects of Canada's retaliatory tariffs.
Sentiment in the real estate market has shifted, and many buyers now believe the situation hasn't turned out to be as bad as initially forecast. That said, he cautioned that "things could change in an instant."
Meanwhile, new listings across Canada rose 0.1% month-over-month.
As of the end of July, there were 202,500 properties listed for sale across Canada, up 10.1% from a year earlier and in line with the long-term average for this time of year.
The actual national average home sale price in July came to $672,784, up 0.6% from a year ago.
CREA's own Home Price Index, designed to track sales of typical homes, held steady between June and July 2025.
BMO senior economist Robert Kavcic said the housing market looked "very balanced and stable" over the summer, with significant regional differences persisting.
"At the national level, sales are steadily returning to long-run norms, inventory has built up but isn't overwhelming the market, and prices are essentially unchanged," his note states.
"In markets where price corrections are still underway, we appear to be approaching levels that are drawing some buyers out of a wait-and-see stance."
As for the Greater Toronto real estate market, it posted its most active July since the start of the pandemic, marking a reversal after months of subdued demand, with buyers waiting for the economic picture to improve.
According to the Toronto Regional Real Estate Board (TRREB), home sales in July rose 10.9% year-over-year, with 6,100 transactions completed - the highest July figure since 2021. "People held off buying all spring, and it looks like by July they finally realized that uncertainty is the new normal, and it's time to make decisions," noted Dave Elle Morrison, a broker with Bosley Real Estate Ltd.
Seasonally adjusted, month-over-month sales growth came in at 13% compared to June. TRREB attributes this to improved housing affordability driven by lower prices and lower mortgage borrowing costs, which are "starting to translate into higher sales."
The average sale price fell 5.5% year-over-year to $1,051,719, while the composite benchmark price (which reflects the value of a typical home) dropped 5.4% over the same period. "More needs to be done, especially when it comes to lowering the cost of borrowing, but it's clear that more and more households are finding affordable options for buying a home," said TRREB President Elechia Barry-Sproule in the press release.
In prior months, analysts had noted buyers holding back amid economic uncertainty tied to the Canada-US trade disputes.
"Back in March and April, a lot of our clients told us, 'We're going to wait for now.' Some of them came back to the market in July," Morrison added.
According to her, buyers also factored in interest rates that are comparatively low relative to last year, along with rising supply. In July, 17,613 new listings were posted across the GTA, up 5.7% from July 2024. Active listings reached 30,215, up 26.2% from 23,936 a year earlier.
That said, Jason Mercer, TRREB's Chief Market Analyst, noted that Canada's economy is still "treading water because of trade uncertainty with the US." "Stimulating domestic demand is a key way to soften the impact. The housing sector can act as a catalyst for growth, since the spending that comes with it stays within the regional economy," he stressed, adding that further rate cuts "would accelerate sales and support employment."
Within the City of Toronto itself, sales rose 11% (to 2,205 transactions), while the rest of the GTA saw sales rise 10.9% (to 3,895). Semi-detached homes posted the strongest growth (+25.5%), followed by detached homes (+11.3%). Townhouse sales rose 7.9%, and condominium sales rose 5.8%.
Right now, buyers are looking at an incredibly favourable situation! Prices have come down and haven't yet started climbing back up, there's plenty to choose from on the market, and you can still negotiate - and on top of all that, this September we're offering rock-bottom mortgage rates that haven't been available in almost 4 years!