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The Bank of Canada has announced that it is maintaining its key policy rate at 2.75%, keeping the Bank Rate at 3% and the deposit rate at 2.70%. This decision comes amid a backdrop of global trade uncertainty and persistent—but contained—inflation, and has important implications for both homebuyers and sellers across the country.
Why Did the Bank Hold the Rate Steady?
Several factors influenced the Bank’s decision:
- Global Uncertainty: Recent changes in US trade policy, ongoing tariff negotiations, and the unpredictable nature of new tariffs have introduced volatility into the global economy. While US tariffs have disrupted trade, the world economy has shown resilience.
- Canadian Resilience: Despite the headwinds, the Canadian economy has remained fairly robust. After strong growth in early 2025 (as exporters rushed to beat new tariffs), Canada’s GDP likely dipped by about 1.5% in the second quarter—mainly due to a drop in exports and weaker US demand.
- Labour Market and Inflation: While sectors affected by trade have seen some softening in job conditions, employment levels remain stable elsewhere. The national unemployment rate has gradually risen to 6.9% as of June, and wage growth has eased. Inflation sits at 1.9% for June, with underlying inflation around 2.5%.
What Could This Mean for Homebuyers and Sellers?
For those in the real estate market, today’s announcement offers a measure of stability:
- Mortgage rates are likely to remain steady in the near term, which may help buyers and homeowners with budgeting and planning.
- Housing activity has slowed, with fewer resales and softer consumer confidence, so buyers may find less competition, while sellers may need to adjust expectations.
- Economic uncertainty and rising unemployment could impact affordability and demand, making it important to stay informed about market trends.
Looking Ahead
The Bank of Canada’s next rate announcement is scheduled for Wednesday, September 17, 2025.
Read the Press Release.
Whether you’re a homeowner, prospective buyer, or real estate investor, understanding these market changes is crucial. As your trusted REALTOR®, I’m here to help you navigate these shifts and make informed decisions! Call, text, email, or DM me to chat about how this announcement affects your real estate plans!
For more information, contact:
Susan Moffat, REALTOR® with Century 21 In-Studio Realty Inc., Brokerage
519.377.5154
susan.moffat@c21.ca
