Canada’s mortgage and housing markets are in a state of recalibration. Recent data highlights a sharp rise in home listing cancellations, growing household debt, and stronger-than-expected earnings from major banks, painting a complex picture for borrowers and lenders alike.

Sellers Pull Listings Amid Market Pressure

In July 2025, nearly 22.5% of home listings were cancelled, a record for the month. Homeowners are increasingly choosing to withdraw their properties rather than accept lower bids. This trend comes as national housing inventory remains about 25% higher than historical averages, keeping pressure on prices.

At the same time, household mortgage debt has surged past C$2.3 trillion, marking the third straight month of significant growth. Analysts attribute this to pre-construction projects from the 2020–2022 boom finally reaching closing, adding stress to household balance sheets.

Mortgage-Expert Insight:

This is less a housing collapse and more a market recalibration, with sellers biding time for better pricing conditions.
Rising debt levels, however, signal fragility—any job market weakness or interest rate shocks could increase arrears.
Buyers should practice tactical patience: monitor relistings and avoid overstretching budgets in uncertain conditions.

Banks Beat Expectations with Stronger Earnings

Despite a fragile housing backdrop, Canada’s major lenders reported robust Q3 results:

Bank of Montreal (BMO) set aside C$797 million for loan-loss provisions, far below estimates of C$948.5 million. Its adjusted earnings hit C$3.23 per share, above forecasts of C$2.95.
Scotiabank provisioned C$1.04 billion, under the expected C$1.19 billion, and posted C$1.88 per share, beating projections of C$1.73.
BMO also expanded its share buyback program to C$30 million, signaling confidence in its financial strength.

Mortgage-Expert Insight:

Credit quality is improving, giving banks greater room to lend competitively.
Borrowers may benefit from stronger refinancing offers or innovative mortgage products as lenders compete.
Nevertheless, global risks and domestic rate shifts remain critical watchpoints.

Wider Market Context

Loan-loss provisions across Canadian banks fell to about C$5.22 billion in Q3, down from C$6.37 billion in Q2. This indicates that lenders are dodging worst-case tariff scenarios and global pressures better than expected.
National housing data showed home sales up 3.8% in July, marking the fourth consecutive monthly increase. While volumes remain modest, the trend suggests early signs of stabilization.

Quick Summary

Trend	Key Takeaway
Listing Cancellations	22.5% of listings withdrawn as sellers hold out for better prices.
Mortgage Debt Growth	Household mortgage debt surpassed C$2.3T, adding systemic pressure.
Bank Earnings	BMO & Scotiabank beat expectations with lower provisions.
Market Resilience	3.8% rise in July home sales offers cautious optimism.

Canada’s housing market sits at a crossroads. Rising debt and cancelled listings reflect ongoing fragility, but strong bank earnings and a modest rebound in sales signal resilience. For borrowers, strategic timing, cautious budgeting, and close attention to Bank of Canada policy will be crucial in navigating the months ahead.

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