Trade tensions cloud the outlook

Economic headwinds compound the market’s challenges. Trade conflict uncertainty triggered by potential U.S. tariffs represents “a major uncertainty,” according to Bank of Canada Governor Tiff Macklem, with implications extending beyond monetary policy. Market conditions deteriorated as trade discussions intensified, according to Re/Max Canada, with economic anxiety permeating buyer psychology.

Mortgage rate hopes dashed

The mortgage rate environment, central to this year’s market thesis, delivered disappointment. Sellers anticipated that meaningful rate declines would revive demand and justify price increases. Instead, inflation has proved more persistent than expected, pressuring the Bank of Canada to hold off on stimulative rate reductions. This dynamic limits the central bank’s ability to cut rates and undermines the fundamental assumption supporting seller confidence.