Canadian Home Sales Rise Again in July 2025

Canadian home sales are showing a surprising resilience in the face of high borrowing costs and global trade tensions. According to the latest data released in August 2025, national home sales rose 3.8% in July compared to June. This marks the fourth straight month of positive growth, suggesting that many buyers are returning to the market despite affordability challenges.

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The Numbers at a Glance

• Month-over-month sales: Up 3.8% in July.
• Year-over-year sales: Up 6.6% compared to July 2024.
• Regional strength: The Greater Toronto Area (GTA) led the gains, with sales rising 17.3% since April.
• Listings: National listings fell slightly, signaling that supply remains tight.

The Canadian Real Estate Association (CREA) noted that while national home prices are still adjusting, the pace of sales growth is faster than many analysts predicted.

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Regional Spotlight: Greater Toronto Area

The GTA remains Canada’s most watched market. From April to July 2025, home sales jumped more than 17%, led by renewed demand for condos and townhomes. Realtors in Toronto say buyers who had been waiting on the sidelines during 2023–24 due to high mortgage rates are finally stepping back in—especially first-time buyers with stable jobs and access to family support for down payments.

In contrast, Vancouver’s housing market remains more cautious, with sales rising only marginally due to continued affordability issues and foreign buyer restrictions.

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Mortgage Rate Pressures Remain

Despite the uptick in sales, homebuyers are still dealing with elevated mortgage rates. Most major banks are offering 5-year fixed rates between 5.25% and 5.45%, while variable rates remain in the 5.9%–6.1% range.

For a family purchasing a $750,000 home with a 20% down payment:

• At a 5.35% 5-year fixed rate, their monthly payment is about $3,600.
• At a 6% variable rate, the monthly payment would be closer to $3,850.

This affordability gap is pushing many borrowers to shorter fixed terms (like 2- or 3-year mortgages) in the hope that rates will drop in 2026.

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What’s Driving the Market?

Several factors explain the rebound in sales:

• Pent-up demand: Buyers who delayed purchases during 2023’s rate hikes are re-entering.
• Population growth: Canada continues to add more than 400,000 immigrants per year, sustaining housing demand.
• Stable economy: Unemployment remains relatively low at 6.1%, giving households some confidence.
• Softening prices: In some regions, home prices are 5–8% lower than their 2022 peaks, making entry points more attractive.

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Expert Insights

According to mortgage broker John Leclair in Mississauga:

“We’re seeing a lot of younger buyers finally jumping in. Even though rates are high, many believe prices could start rising again if they wait too long.”

Meanwhile, economist Laura Gagnon at RBC warned:

“This rebound doesn’t mean affordability has been solved. It simply reflects that Canadians are adapting to a higher-rate environment.”

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What This Means for Buyers

For prospective buyers:

• Expect competition in Toronto and surrounding cities—bidding wars are re-emerging for well-located homes under $1M.
• Be mortgage-ready: Get pre-approved before shopping, as lenders are strict with income and debt checks.
• Consider alternative lenders: Some credit unions and monoline lenders are offering slightly lower fixed rates.

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What This Means for Homeowners

• If you’re up for renewal in 2025–26, brace for higher payments. A household rolling over a $500,000 mortgage from 2.5% to 5.5% could see monthly costs jump by $600–$800.
• Refinancing to consolidate debts may make sense if you’re carrying high-interest credit cards or personal loans.
• Home equity remains strong in many markets, meaning reverse mortgages and HELOCs are still an option for seniors.

Canada’s housing market is showing unexpected strength in mid-2025. While high interest rates continue to weigh on affordability, rising sales suggest buyer confidence is slowly returning. If supply doesn’t improve, prices could creep upward again later this year.

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