How Canadians feel about the housing market right now

Interest rates are at a high right now and Canadians are split on what will happen next. While 30% are bracing for higher rates, 28% are betting that rates have hit their peak and will stay steady, and another 28% say they expect rates to drop. This “wait and see” approach, combined with slow economic growth and continued inflation, has cast a shadow of uncertainty on the housing market for the time being.

The majority of homeowners with a mortgage have a fixed rate — 78% — and almost half of them are due for renewal in the next 2 years. Most — 60% — anticipate a significant rate increase when they renew, and many are taking proactive steps to soften the impact. Nearly half say they’re cutting back on expenses, and 1 in 3 say they’re shopping around for better mortgage rates.

For most fixed rate mortgage renewers facing a payment increase, selling is not their first choice of financial strategies. Only 5% are choosing to sell their homes to rent, getting out of the homeownership game altogether. However, a notable minority say they might downsize or relocate — 14% are contemplating selling their current homes to move to smaller and less expensive ones. And another 7% are considering selling to move to a less expensive neighbourhood or city.

While 37% of variable rate mortgage holders say rate hikes have had a moderate to severe impact on their standard of living, few are making changes to their mortgage or considering selling their home. While 51% of variable rate mortgage holders say they’re cutting back on expenses to offset their rate hikes, they are mostly not taking other measures. Only a quarter intend on switching to a fixed rate mortgage in the next year.

Many Canadians have hit a speed bump on the road to homeownership. While the homeowner intenders surveyed for this poll all intend to purchase a home in the next 2 years, 70% of them said right now is not the best time to buy. More than three-quarters say interest rates and inflation have forced them to push out their timelines.