Is it a good time to buy a house? Like many other Canadians, you’re not alone if you struggle to answer this question. It’s been an intense few years in the Canadian property market. After a record increase in house prices throughout the pandemic, followed by the Bank of Canada policy rate increases, Canadians are now more uncertain about buying than ever. 

The price of a home in Canada fell slightly in 2024 compared to 2023. However, home prices are still up approximately 35% from 5 years ago. While major cities like Toronto and Vancouver still see some of the highest real estate prices, the strain on property inventory has been a problem throughout the country. 

As interest rates come down, many Canadians wonder: Should I buy a house now? To help you figure it out, we’ve broken down the main factors to consider if you’re a prospective homeowner in Canada.

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Key Takeaways

• The best time to buy often depends on regional market trends and seasonal patterns.
• Your financial situation and long-term plans are crucial in determining if now is the right time to buy.
• Researching and connecting with professionals can help ensure you get a great deal on your home purchase.

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Market Considerations for First-Time Home Buyers

Buying a house is a considerable commitment and depends on whether or not you have the budget, job stability, and credit to justify it. If you’re considering buying a home soon, here are some market conditions that should inform your decision to purchase or not in 2025.

#1. What Do Interest Rates Look Like?

For the last decade, the Bank of Canada’s key policy rate has remained at 1.75%. It currently sits at , and early economist predictions suggest that rates could decrease to 2.50% by the end of 2025. 

What does that mean for home buyers? Higher mortgage rates mean higher monthly payments, with a slight percentage difference over the lifetime of a loan equalling thousands of dollars. You could argue that now is the best time to buy a home since interest rates could reverse course and climb once again if predictions are wrong.

#2. Will Home Prices Continue Rising?

This one’s up for debate. While we’ve seen house prices decline recently, they are still up around 35% compared to 5 years ago. Home prices shot way up during 2021 and early 2022, but they’ve started to cool down. Of course, they’re still not as cheap as pre-COVID, but market activity is slowing, and home price rises, while ongoing in some areas, are not as intense as they were a few years ago.

#3. Is it a Seller’s Market?

In a seller’s market, sellers have more leverage because the supply of new listings is low or demand is unseasonably high. In technical terms, a seller’s market has a sales-to-new listings ratio (SNLR) of 60% or more. This means there are more sales than newly listed properties, so things get snatched up quickly. 

Almost without fail, most major and secondary cities in Canada have been sellers’ markets for the duration of the pandemic. For most of 2024, many markets fell below that all-important 60% figure to balanced (40% to 59%) or buyer (below 40%)  territory. Only a few markets maintained seller territory throughout the year. 

#4. How Fast Are Homes Selling?

The sales pace for properties in Canada, especially in major cities, has been blisteringly fast for the last few years. In some competitive regions, houses are bought almost immediately after listing. Canada has a housing shortage, and the number of newly listed properties has remained consistently low throughout 2024.

Is Now a Good Time to Buy a House?

Mortgage rates are much higher than they have been in many years, and home prices have increased significantly. Coupled with high interest rates, it is hard for many would-be homebuyers to qualify for a mortgage, discouraging those who want to enter the housing market now.

However, buying now, if you have the means to do so, means you can start building equity right away rather than waiting for home prices or interest rates to fall first. Equity increases your net worth, and having equity in a home gives you the flexibility to leverage its value when you need it most. 

Additionally, purchasing now rather than waiting may give you bargaining power when negotiating home prices. If mortgage rates continue to drop, which experts predict will happen this year, buyers who have been on the sidelines will return to the housing market, driving competition and higher home prices. 

Now might be the right time to buy if you have excellent credit, have enough saved for a downpayment, can comfortably afford the projected mortgage payments, and can see yourself staying in the home for the foreseeable future.

How Important is Seasonality When Buying a Home?

The time of year can significantly affect the home-buying process. Supply and demand create a seasonal cycle in the housing market, which affects the number of homes on the market and the purchase price. 

Historically, home sales pick up in the spring and summer, then cool during the fall and winter. If you’re looking for a deal in the housing market, the best time to buy is in the fall and winter when inventory and the number of buyers decline. Spring and summer tend to be hot markets where inventory and buyers pick up, driving prices higher. 

Below, we explore how each season can impact your decision to purchase a property.

Buying a Home in Winter

Winter is often overlooked primarily due to the cold weather and holidays. Only a few prospective homebuyers want to brave the winter weather to look at homes, and the holidays are generally too busy for most with family plans to keep up the home search. 

Fewer buyers in the market means less competition and more potential to negotiate a lower price. During winter, sellers are usually highly motivated to sell, leaving plenty of room for negotiation.

However, there are a few downsides to purchasing during the winter months. Less inventory means fewer options for homes. Additionally, home inspections of outdoor areas can be challenging due to snow and ice.

Buying a Home in the Spring

Spring is typically the busiest time of year for real estate. More properties become available, giving prospective buyers more options. 

With the weather improving, it is an ideal time to highlight a home’s curb appeal with landscaping, making it more attractive to potential buyers. Nicer weather also makes it easier to complete home inspections of the property’s exterior. 

However, purchasing in the spring means you will compete with many other potential buyers, which could result in bidding wars. You could pay way more for a property than if you purchased any other time of the year. There’s often less room to negotiate with sellers in a hot housing market.

Buying a home in the Summer

The summer months typically continue the momentum of the spring market, with higher inventory and buyer demand. The weather makes it ideal for viewing homes, and the many open houses make it easier to view multiple properties on the same day. 

Early summer typically mirrors the spring market, with little room to negotiate with sellers and the potential for bidding wars. Buyers with children are motivated to purchase by this point, so they have time to settle into their new homes before the school year begins. 

Late summer can offer a better balance as the market begins to cool with less buyer competition and a bit more room for negotiations, as sellers may be more motivated to sell their properties before the market starts to decline in the fall. 

Buying a Home in the Fall

As the leaves start to turn, so do home prices typically in favour of the buyer. The buying frenzy of the spring and summer markets is beginning to cool, and sellers who have failed to sell may be more willing to negotiate prices before the winter slow down. 

Fall typically still has a balanced level of inventory with more competitive pricing. The weather is still relatively favourable for exterior home inspections, and as the season progresses, buyers may have more negotiating power to secure a deal before winter. 

However, as winter approaches, the number of home listings may decrease, giving you fewer options.

How to Research Market Trends to Get a Good Price On Your Home

Understanding how to research and read into market trends is essential to getting a deal as a buyer. Here are some strategies to help you navigate the housing market. 

• Monitor online news – the internet is a great source of information. You can find information on the housing market through media and news sites, real estate websites, and even blogs focused on the housing market. Google allows you to create free Google Alerts that notify you when a page matching your keywords appears in its search engine. 
• Social media – Following real estate agents, brokers, agencies, and experts in the real estate field on social media can help you keep up with the latest trends in the market. However, ensure you follow credible sources so the information you receive is factual. 
• Monitor mortgage rates – rates are constantly changing, which can significantly impact your purchasing power and ability to qualify for a mortgage. Keeping a close eye on rates, which can be accessed online across all the big banks and lender sites and monitoring the trends and patterns the market cycles through can help you identify the most advantageous time to enter the market.  
• Track home prices and the market – regularly check home prices in your area using local real estate board websites or CREA, which can keep you updated on home prices and trends. Pay particular attention to the type of market your desired area is in, which can be found in each regional board’s monthly housing market report. A buyer’s market, characterized by low prices and high availability, is an ideal time to make a purchase. A seller’s market, where prices are high and availability is low, can be challenging for buyers. 
• Seek professional advice – engage with a real estate agent with comprehensive knowledge of the local real estate market. They can provide insights into local market data and trends to help you find the ideal time to get a good deal on a home.

Frequently Asked Questions

Final Thoughts

Ultimately, the answer to the question, “Is now a good time to buy a house?” depends on your individual circumstances. While it’s important to consider seasonality and market conditions, evaluating your finances and long-term plans is equally crucial. It’s impossible to time the market perfectly, but understanding what influences the housing market and interest rates can help you secure a deal. 

Whether you decide to buy now or wait, reach out to nesto’s experienced mortgage experts, who can help you secure the best rate on your mortgage.

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