What to expect for the summer market

Wondering what’s going on with the housing market as summer hits its stride? Well, it seems like the market is heating up right alongside the weather—and some experts are expecting it to stay that way. Here’s what’s happening.

Interest rates rise again (and maybe again)…

The Bank of Canada raised its benchmark interest rate to 4.75% at the beginning of June. Though the inflation rate actually dropped to 3.4% at the end of the month, many experts believe another rate hike could still be announced at the next meeting on July 12.

…But the market is heating up

Despite mortgage rates going up due to the Bank of Canada’s decision, all signs point to a hot summer market. Key factors contributing to this change include increased immigration, a strengthening labour market, and a lack of supply for certain types of housing, such as detached homes. Plus, soaring rent prices in Toronto and the GTA are driving people to invest in property instead if they can.

What else is signalling a stronger housing market?

Listings and sales are increasing again. According to RBC Economics, home resales are up again and are even approaching pre-pandemic levels. In Ontario, transactions increased by 22% over the past two months.
Prices are on the rise. Though home prices remain lower than they were a year ago, they have gone up in the past two consecutive months—the national composite MLS Home Price Index rose 4.1%. Based on this trend, the price could continue to climb.
It’s still a seller’s market. The market has seen low supply over the past several months as people have held off selling their homes, however, that’s changing—but the increase in supply isn’t enough to swing to a buyers’ market.