Bank of Canada Pauses

The Bank of Canada is juggling with unemployment risk on one side and inflation risk on the other. Wednesday, the Bank tried its best to keep a balance by holding its policy rate at 2.75%. Prime rate remains at 4.95%.

Current markets are pricing in a 45% chance of a cut at the next meeting (July 30^th). Before this meeting we will see 2 inflation reports and 2 employment reports. If unemployment ticks above 7%, this will help the chance of another rate cut. With immigration remaining strong, unemployment will continue to rise. Capital Economics is projecting an unemployment rate of 7.50% at its peak.

The Bank’s communications alluded to elevated underlying inflation, as well as the fact that “recent surveys indicate that households continue to expect that tariffs will raise prices and many businesses say they intend to pass on the costs of higher tariffs.” In other words, the Bank still wants additional time to assess whether tariff-related cost increases will lead to persistent inflation.

Active Listings Continue to Rise

May’s sales were down 13.3% compared to the 7,206 sales recorded in May 2024, highlighting how trade uncertainty has weighed on the market. Sales were also up 11.7% compared to the 5,585 sales recorded in April 2025. “This was the second monthly increase in a row,” said TRREB.

TRREB also reported that there were 21,819 new listings in the month, marking a 14% rise over last May’s level and a 15.8% increase month over month. New listings were higher than they’ve been since March 2021, when there were 22,709 reported.

The real surge in the May report was active listings, with a staggering 30,964 on the market at the end of May, representing a 41.5% increase year over year and a 13% rise month over month.

Mortgage Volumes

Lenders are starting to see increased mortgage volumes, all be it, still historically low in comparison.

Canadian GDP

Headline GDP showed modest growth rising 2.20% annually in Q1 (estimate was 1.70%)

Oxford Economics wrote after the report: “We think Canada’s economy has slipped into a trade war-induced recession that will last through the end of 2025.”

With tariff impacts still not realized, these numbers will continue shift throughout the calendar year.

US Core Inflation

A four year low, US core inflation is sitting at 2.5% y/y. This is down 0.20%.

Tariffs impacts moving forward will continue to impact the readings.

Current Interest Rates

CONVENTIONAL

• 5 year fixed, 30 yr amortization – 4.39%
• 3 year fixed, 30 yr amortization – 4.35%
• 2 year fixed, 30 yr amortization – 4.84%
• 5 year variable, 30 yr amortization – Prime – 0.40% = 4.55%
• 5 year fixed, 25 yr amortization – 4.29%
• 3 year fixed, 25 yr amortization – 4.30%
• 2 year fixed, 25 yr amortization – 4.74%
• 5 year variable, 25 yr amortization – Prime – 0.50% = 4.45%

INSURED

• 5 year fixed, up to 30 yr amortization – 4.19%
• 4 year fixed, up to 30 amortization – 4.24%
• 3 year fixed, up to 30 amortization – 4.04%
• 5 year variable, up to 30 amortization – Prime – .70% = 4.25%

Fast Facts

• 92% – Share of royalties earned by Canadian artists onSpotify in 2024 that came from listeners outside of Canada. Listeners stream 15million hours of Canadian music every day.