Bank of Canada Keeps Interest Rates Unchanged

The Bank of Canada decided to keep its interest rate at 2.75% which poses no surprises there. This is the third time in a row they’ve left it unchanged after cutting rates several times over the past year. They’re hitting pause for now and the inflation numbers showed prices still rising, which makes a rate cut unlikely for now. In short, they’re being careful about making any more rate changes.

Home sales across Canada went up by 2.8% in June 2025, adding to the 3.5% increase we saw in May.

Shaun Cathcart, Senior Economist at CREA, summed it up by saying June looked a lot like May, with steady prices and a small bump in sales. With single-family homes still pricey, more buyers are turning to townhomes in the Metro Vancouver area. Townhome sales have picked up noticeably, offering a more affordable way into popular neighborhoods. He added that the housing market recovery might just have been delayed a bit after a rough start to the year. That said, uncertainty remains especially with the new tariff threats.

Home prices across Canada stayed mostly flat in June 2025, dipping just 0.2% compared to May. That’s a smaller drop than we saw earlier this year, when prices were falling by around 1% a month from February to April.

Compared to a year ago, prices are down 3.7%. But since most of the price drops happened in the second half of 2024, we’ll likely see those declines start in the coming months.

On top of that, longer-term interest rates which influence fixed mortgage rates, have been climbing since March. Canada’s 5-year bond yield recently pushed above 3%, a key level that could lead to another bump in fixed mortgage rates. Meanwhile, the 2-year yield is now higher than the Bank’s key rate, suggesting we may have reached the end of this rate-cutting cycle. Unless the economy takes a turn. That said, given the unpredictability of U.S. trade policy, there’s still a lot of uncertainty in the outlook.

Navigating BC’s housing market in 2025 can be challenging with ongoing affordability concerns. Our team provides expert guidance and access to a wide network of lenders to help clients secure the best mortgage rates and terms based on their unique situations. Clients and realtors are encouraged to reach out anytime to discuss how our team can support your home financing goals.