The Canadian housing market is showing signs of renewed strength as we approach the end of 2025. According to the latest report from the Canadian Real Estate Association (CREA), home sales across the country are on track for a strong finish to the year, buoyed by lower borrowing costs, improving consumer confidence, and a more balanced market.
After several years of adjustment, the national housing market appears to be finding its footing once again. CREA's data shows that both home sales and average prices have been steadily improving in most major markets. This rebound comes as many buyers and sellers regain confidence, encouraged by recent interest rate reductions and a more predictable lending environment.
While the pace of growth varies from region to region, markets that experienced the sharpest slowdowns during the high-rate period-such as Ontario and British Columbia-are now seeing a modest recovery. Meanwhile, more affordable provinces like Alberta, Saskatchewan, and parts of Atlantic Canada continue to attract strong demand from both first-time buyers and relocating families.
One of the key drivers behind the recent uptick in activity is the Bank of Canada's move to gradually reduce interest rates in 2025. These rate cuts have helped improve affordability for many households that had been priced out of the market in previous years. Lower rates mean lower monthly mortgage payments, allowing buyers to stretch their budgets a little further and renew their homeownership goals.
For existing homeowners, refinancing or renewing at a lower rate has also provided some much-needed financial relief, especially after several years of rising costs. Mortgage professionals across the country are reporting an increase in consultations as clients explore opportunities to secure better terms or plan their next purchase.
CREA's latest figures indicate that the national average home price has been edging upward in recent months. While prices remain below their 2022 peaks, the stabilization is a positive sign for both homeowners and the broader economy. This trend suggests that Canada's housing market is entering a healthier phase, where prices are more closely aligned with fundamentals like income growth and supply levels.
Balanced conditions in many cities are also giving buyers more time and choice. This shift away from the intense bidding wars of past years has created opportunities for well-qualified buyers to negotiate favourable terms and find homes that truly meet their needs.
Despite the encouraging rebound in sales, Canada continues to face a structural shortage of housing supply. CREA notes that new listings have increased slightly, but the number of available homes remains below long-term averages in many markets. Population growth and continued immigration are putting added pressure on supply, highlighting the need for ongoing construction and development across the country.
Federal and provincial housing initiatives are expected to play a vital role in addressing this imbalance. As new housing projects move forward, more inventory could help keep price growth sustainable in 2026 and beyond.
For Canadians thinking about buying, selling, or refinancing, the current market presents a window of opportunity. Lower interest rates, stable prices, and growing confidence are combining to create favourable conditions for those ready to make a move. Whether you're entering the market for the first time, upgrading to a larger home, or considering an investment property, understanding your financing options is more important than ever.
Working with an experienced mortgage broker can help you navigate the changing landscape, compare lenders, and find a solution that fits your budget and long-term goals. A broker can also assist with pre-approvals, rate holds, and refinancing strategies designed to take advantage of today's improving conditions.
As CREA forecasts continued stability into early 2026, most experts agree that Canada's housing market is transitioning into a more balanced and sustainable environment. While challenges remain-especially around supply and affordability-the overall outlook is more optimistic than it has been in several years.
If you've been waiting for the right moment to act, now may be an ideal time to review your mortgage options and prepare for what's ahead. Reach out to a licensed mortgage professional in your area to discuss how today's market trends could work in your favour.
Data and insights referenced in this article are based on the October 2025 housing market update from the Canadian Real Estate Association (CREA).