There’s a lot happening in the Canadian economy right now, and if you’re trying to decide whether to buy a home, sell one, renew a mortgage or simply wait and see what happens next, the headlines can make things feel more complicated than they need to be.
Inflation is sitting at 3%. Gasoline prices remain elevated. Fixed mortgage rates have faced upward pressure. Home sales have slowed slightly, while new listings are increasing. And through all of this, Canadian home prices have remained relatively stable month over month.
So, is this good news or bad news?
I think the better answer is: it depends on your situation—and there may be some real opportunities hiding inside these numbers.
Let’s break down what’s happening and, more importantly, what it could mean for you.
Inflation Is Still at 3%—But What’s Driving It Is Changing
Statistics Canada reported that the Consumer Price Index increased 3.0% year over year in August, matching July’s annual increase. Perhaps more interesting is what happens when gasoline is removed from the equation: inflation was 2.4% excluding gasoline.
That distinction matters.
Some of the areas that have put tremendous pressure on Canadian household budgets are showing signs of moderating. Grocery prices increased 2.8% year over year in August, while shelter costs increased 1.5%—both below the overall 3% inflation number.
The major outlier continues to be energy.
Gasoline prices were up 22.8% compared with August last year, although that was an improvement from July’s 25.7% year-over-year increase. Transportation costs overall were up 7.5%.
For Canadian families, that isn’t an abstract economic statistic. We see it every time we fill the tank, and higher transportation costs can eventually find their way into the price of other goods and services.
Why Inflation Matters to Your Mortgage
This is where the inflation conversation becomes particularly important for homeowners and homebuyers.
The Bank of Canada maintained its policy rate at 2.25% on September 2, but it specifically identified increased upside risks to inflation from elevated energy prices and tariffs. The Bank also noted that core inflation measures had remained close to 2%.
The next Bank of Canada rate announcement is scheduled for October 28, 2026.
That doesn’t mean rates will automatically go up—or down.
It means the Bank will continue watching inflation, economic growth and the effects of global uncertainty before making its next decision.
And remember, Bank of Canada decisions aren’t the only thing affecting mortgage rates. Fixed mortgage rates are heavily influenced by bond yields, and those yields have recently moved higher. CREA also noted this month that higher bond yields have already pushed fixed mortgage rates upward.
That’s why waiting for the next Bank of Canada announcement isn’t necessarily a mortgage strategy.
Your mortgage strategy should be based on your finances, your goals and the options available to you—not a prediction about what rates might do next.
Meanwhile, Canada’s Housing Market Is Giving Buyers More Choice
This is where things get particularly interesting for prospective homebuyers.
According to the latest figures from the Canadian Real Estate Association (CREA), national home sales declined 0.7% from July to August, while new listings increased 3.3%. The MLS® Home Price Index was unchanged month over month and down 3% compared with a year earlier.
The national sales-to-new-listings ratio also declined from 51.1% to 49.1%. CREA considers readings between roughly 45% and 65% consistent with balanced housing market conditions.
In plain English?
More homes are coming onto the market, sales aren’t keeping pace with those new listings, and prices nationally aren’t running away from buyers.
For a qualified buyer with their financing in order, that can be a pretty interesting combination.
Remember That Summer Lull We Talked About?
This actually ties perfectly into something we’ve been talking about at Mainstream Mortgages.
July and August often bring a natural summer lull. Pre-approved buyers turn their attention toward vacations, cottages, camping, family and enjoying our very short Canadian summer.
But the shrewd buyer keeps paying attention.
Now we’re coming out of that summer lull with a fresh increase in listings and a market that, nationally, remains balanced.
That doesn’t mean every seller is suddenly going to accept a low offer, and real estate conditions vary tremendously from one community to another. But it can mean more selection, less pressure and potentially more negotiating room than buyers experience in a hot seller’s market.
Sometimes the best buying opportunity isn’t when everyone feels confident.
Sometimes it’s when everyone else is still sitting on the sidelines trying to figure out what happens next.
So, Are We Heading for a Busy Fall Market?
That’s the big question.
On the positive side, we’ve got fresh inventory coming onto the market. CREA reported that the August increase in supply was broad-based across Canada’s largest markets and particularly noticeable toward the end of the month.
On the other hand, Canadians are dealing with economic uncertainty, higher energy costs and borrowing costs that need to be watched carefully.
There are also mixed signals coming from the broader economy.
Statistics Canada’s July manufacturing report showed total manufacturing sales declined 0.4% to $78.7 billion after five consecutive monthly increases. Despite the monthly decline, sales remained 10.9% higher than a year earlier. Chemical product sales declined 6.6%, food manufacturing fell 1.4%, while petroleum and coal product sales increased 1.9%.
In other words, this isn’t an economy moving neatly in one direction.
And neither is the housing market.
My expectation is that we could see a moderated and selective fall market—one where properly prepared buyers and sellers may have an advantage over people trying to time the market perfectly.
What Should Homebuyers Do Right Now?
If you’re thinking about buying this fall, the first thing I would do isn’t start scrolling through listings.
I’d make sure your mortgage pre-approval is current.
If you were pre-approved during the spring or early summer and then took a break from house hunting, things may have changed. Rates can change. Lender programs can change. Your personal financial picture may have changed. And the price range that makes sense for your household deserves another look.
An updated pre-approval gives you a clear understanding of your buying power and allows you to move quickly if the right home appears.
And in a market where buyers may have more choice, being financially prepared gives you something even more valuable:
options.
What About Current Homeowners?
The same principle applies.
If your mortgage renewal is approaching, don’t assume the renewal offer sitting in your mailbox is automatically your best option.
Your existing lender knows that changing lenders takes some effort, and convenience can be expensive.
Before signing your mortgage renewal, have us take a second look.
We can review the rate, term, prepayment privileges and overall mortgage structure and compare them with other available options. Even when staying with your current lender ultimately makes sense, you’ll know you’ve made that decision with the benefit of a second opinion.
Realtors: This Is a Great Time to Reconnect With Your Pre-Approved Buyers
For our Realtor partners, there’s another opportunity in this data.
Think about the buyers you worked with this spring who didn’t purchase.
Some got discouraged. Some were outbid. Some couldn’t find the right property. And plenty simply decided to enjoy their summer and revisit the search in the fall.
Now is the time to call them.
There are fresh listings entering the market, and those buyers may have more selection than they did a few months ago.
We’re happy to review and update their pre-approvals so you know exactly which clients are ready to get back into the market.
The Bottom Line: Don’t Try to Predict the Market—Be Prepared for It
Inflation remains higher than anyone would like, but the underlying picture is more nuanced than the 3% headline suggests. Gasoline is playing an outsized role, while grocery and shelter inflation have moderated. Meanwhile, Canada’s housing market has more new listings, relatively stable month-over-month prices and a sales-to-new-listings ratio firmly within balanced territory.
There are risks ahead, and nobody can tell you with certainty where mortgage rates or home prices will be six months from now.
But Canadians still need homes. Families grow. Jobs change. People relocate. Renters decide they want to become homeowners. Existing homeowners need to renew. And life doesn’t always wait for the economic headlines to become perfectly clear.
Our job isn’t to predict the future for you. Our job is to help you understand your options and build a mortgage strategy that makes sense in the market we have today.
Experience Matters—Especially in an Uncertain Market
At Mainstream Mortgages, our advice is backed by decades of combined mortgage experience and a long track record of helping Canadian families navigate changing interest-rate environments, lender policies and real estate markets.
As part of Dominion Lending Centres, our team works with access to a wide range of lenders and mortgage solutions. That allows us to look beyond a single bank or a single mortgage product and focus on finding a financing strategy that fits you.
Our award-winning Mainstream Mortgages team—Colton Boudreau, Peter Paley and Derek Vandall—believes mortgage advice should be straightforward, educational and focused on helping Canadians make informed financial decisions.
Whether you’re buying your first home, moving up, purchasing an investment property, refinancing or approaching a renewal, we’re here to help you understand the numbers before you make the decision.
Let’s Talk Before You Make Your Next Move
Homebuyers: If your pre-approval is a few months old, let’s update it before you start seriously shopping this fall.
Homeowners: If your renewal is coming up, don’t sign it without getting a second opinion from us.
Realtors: Send us those spring and summer buyers who are ready to get back into the market. We’ll make sure their financing is current so they’re ready when you find them the right property.
Industry partners: If you have a client who could benefit from a mortgage review, we’re always happy to collaborate and provide straightforward, professional advice.
Mainstream Mortgages
Colton Boudreau • Peter Paley • Derek Vandall
Call/Text: (431) 482-2187
Email: GreatRates@MainstreamMortgages.com
MainstreamMortgages.ca
Get the advice. Know your options. Then make your move with confidence.