With the start of the new year, many of us are looking ahead at what 2025 holds in store relating to the real estate market. Here are 3 thing impacting mortgages and real estate.
Unemployment drops, for now.
The current real estate market is full of projections around mortgage rates and real estate prices. One factor that may throw a wrench in the works is unemployment. While the latest data shows unemployment dropping, it remains to be seen how long this trend will continue.
51st State? How would a trade war impact Canada
The ongoing trade tensions between the US and its trading partners, including Canada, could have significant implications for the Canadian economy and, by extension, the real estate market. The impact on Canada’s exports and overall economic performance will be closely watched as the US contemplates potential tariffs and other trade barriers.
2025 Market recap
The mortgage and real estate markets are expected to continue evolving in 2025. With uncertain interest rates and bond yields, the industry must adapt to changing conditions. The impact of factors like the trade war and potential shifts in the Canadian economy will also be crucial in shaping the market over the next few years.
In the current market, a flurry of projections around mortgage rates and real estate prices has emerged. While some experts predict rates could drop from 0.25% to 1.25%, others foresee a more modest decline. Similarly, real estate prices are expected to rise between 4% and 6%, depending on the location.
One consistent theme, however, is the expectation of lower rates and higher sales activity. This trend is driven by various factors, including the overall economic conditions and the actions of central banks.
Despite the positive outlook, the potential impact of unemployment cannot be overlooked. The latest data shows a drop in unemployment, but it remains to be seen how long this trend will continue. Factors such as the trade war and its implications for the Canadian economy could significantly impact the job market and, consequently, the real estate sector.
Another Point to Consider in this Recap
Another crucial consideration is the trade war between the US and its trading partners, including Canada. The impact on Canada’s exports and overall economic performance will be closely monitored as the US contemplates potential tariffs and other trade barriers. A slowdown in the Canadian economy could lead to a more balanced real estate market, with reduced demand and potentially a slowdown in price appreciation.
The mortgage and real estate markets are expected to continue evolving in 2025. With uncertain interest rates and bond yields, the industry must adapt to changing conditions. The impact of factors like the trade war and potential shifts in the Canadian economy will also be crucial in shaping the market over the next few years.
This article provides an overview of the current state of the mortgage and real estate sectors. It notes the uncertainty surrounding interest rates, noting that while there may be 2 to 3 more rate cuts, there could also be a pause due to the unpredictability of the US market. Bond yields, currently around 3%, were also highlighted as a potential area of volatility, with the possibility of a 0.5-point move in either direction.
Regarding the real estate market, I noted that the Toronto Regional Real Estate Board saw a 2.6% increase in sales last year and projected a 6.6% increase in sales and a 4.4% increase in prices this year. However, the potential impact of the trade war and tariffs on the Canadian economy and unemployment is also discussed, as these factors could lead to more balance in the real estate market.
What Does All This Mean?
The mortgage and real estate markets have faced a complex and ever-changing landscape. While the current outlook is generally positive, with expectations of lower rates and higher sales activity, the potential impact of unemployment, the trade war, and other economic factors cannot be ignored. As the industry navigates these challenges, it is crucial for stakeholders to stay informed and adaptable to succeed in the years to come.
Written for you by:
Your local Realtor®
If you are looking to either Buy or Sell, contact me at 705-927-6236
Brad Sinclair, Sales Representative
Team Lead at The Brad Sinclair Team
Royal Heritage Realty
Your inside source to cottage country
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