CMHC Q2 2025 Results: Housing Market Cools, Insurance Demand Climbs

Canada’s housing market continued to show signs of cooling in the second quarter of 2025, according to the latest results from the Canada Mortgage and Housing Corporation (CMHC). Home prices and sales volumes dipped modestly year-over-year, but a surprising twist emerged: demand for mortgage insurance products actually grew, suggesting that risk management remains top of mind for both lenders and borrowers in today’s uncertain market.

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Key Findings from CMHC’s Q2 Report

• MLS® Home Prices: Averaged C$668,000 in the first half of 2025, a 2% decline compared to the same period in 2024.
• MLS® Sales: Averaged 454,000 units (SAAR), also down 2% from last year.
• Market Sentiment: While overall demand cooled, the report highlights that affordability challenges and higher mortgage rates continue to weigh on households.

Despite this slowdown, CMHC noted higher demand for transactional homeowner mortgage insurance and multi-unit insurance products, reflecting a growing appetite for risk coverage even in a softer market.

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Why Housing is Cooling

The dip in activity reflects several converging pressures:

• High Interest Rates: Borrowing costs remain elevated after a series of rate hikes by the Bank of Canada since 2022.
• Affordability Crisis: Price-to-income ratios remain stretched, particularly in urban centres like Toronto and Vancouver.
• Economic Uncertainty: Recent GDP contraction and slowing job growth are keeping many potential buyers on the sidelines.

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The Insurance Angle

Perhaps the most significant takeaway from CMHC’s report is the increase in mortgage insurance demand:

1. Transactional Homeowner Mortgage Insurance: Uptick indicates more first-time buyers or high-ratio borrowers are turning to insured lending for added security.
2. Multi-Unit Mortgage Insurance: Demand growth reflects continued interest in rental construction projects, even as broader housing activity softens.

This trend shows that, even amid market weakness, risk mitigation remains a priority for lenders and developers alike.

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Regional Picture

While national averages show a slowdown, the picture is uneven across Canada:

• Ontario & B.C.: Cooling most visibly, with Toronto and Vancouver seeing slower sales and mild price declines.
• Prairies: More resilience, particularly in Saskatchewan, where sales and prices remain relatively firm.
• Atlantic Canada: Stronger activity persists, supported by affordability and steady migration trends.

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Expert Commentary

• “Housing is cooling, but insurance activity proves that the market is adapting—not collapsing. Lenders and developers still see opportunities, particularly in multi-unit projects.” — Mortgage News Canada
• “Demand for insured mortgages is a reminder that affordability challenges are pushing buyers into segments where CMHC support is essential.” — Housing Analyst, Yahoo Finance

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Implications for Borrowers

• First-Time Buyers: More likely to seek insured mortgages to qualify in a high-cost environment.
• Renewals & Refinancing: Even with fewer sales, renewals will drive insurance activity as households manage higher payments.
• Developers: Multi-unit demand could remain strong, with insurers providing a critical safety net for financing.

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Why This Matters

The Q2 CMHC results highlight a paradox: while the housing market slows, insurance activity rises. For the mortgage industry, this signals that risk management is becoming a central part of the market’s new equilibrium.

• Borrowers are adapting by seeking insured solutions.
• Developers are leveraging CMHC products to keep rental projects alive.
• Policymakers are reminded that affordability remains the biggest challenge—even in a cooling market.

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Canada’s housing story in 2025 is not just about falling sales or modest price declines—it’s about how the industry is rebalancing through insurance, risk management, and targeted demand. The next few months, especially with the Bank of Canada’s upcoming rate decision, will show whether this balance can hold.