Strong Momentum Heading Into Fall

According to the Canadian Real Estate Association (CREA), national home sales rose 1.1% month-over-month in August 2025, marking the best August since 2021. This was also the fifth straight month of growth, with total activity up 12.5% since March.

While sales in the Greater Toronto Area (GTA) dipped slightly, that was more than offset by stronger activity in Montreal, Greater Vancouver, and Ottawa. CREA’s Senior Economist, Shaun Cathcart, noted that new listings typically surge at the start of September, a trend seen again this year. This could set the stage for stronger fall sales if buyer demand holds steady.

As we all may have heard, the Bank of Canada announced on September 17th that it has lowered its overnight policy rate by 25 basis points to 2.5%. The rate cut was driven by three key factors:

1. A softer labour market, signalling slowing economic momentum.

2. Easing inflation pressures, with reduced risk of future price growth.

3. The removal of most tariffs has lowered upside risks to inflation.

While uncertainty remains, the Bank noted that with a weaker economy and cooling price pressures, a rate reduction was appropriate to help balance risks ahead. Policymakers emphasized they will continue monitoring data closely and remain ready to adjust policy as needed in response to new developments.

While the Bank of Canada offered few hints about its next moves, the current trend points toward at least one more rate cut before year-end. The next policy announcements are scheduled for October 29 and December 10, and many economists expect the overnight rate to end 2025 between 2.0% and 2.25%. 

Changes in the Bank of Canada’s policy rate can impact your mortgage, influencing both your monthly payments and long-term financial planning. Whether you have a variable or fixed-rate mortgage, understanding these dynamics can help you make informed decisions and navigate the evolving economic landscape. Reach out to our team if you have any questions about your mortgage!