Where Ontario's Housing and Mortgage Market Stands Right Now

The market has cooled, but it isn't collapsing Ontario's resale market has shifted from the frenzy of a few years ago into something closer to balanced-to-buyer's territory. Provincially, the average resale home price in July came in at $753,300 — down 4.6% from a year earlier, according to data from the Ontario Real Estate Association. Single-family homes held up best of the property types, while townhouses and condo apartments saw steeper declines. Inventory tells the more interesting story. Active listings across the province sat well above their 10-year seasonal average through August, and months of inventory remain higher than the long-run norm for this time of year — a clear signal that supply has been outpacing demand. That said, the gap has been narrowing: sellers have been pulling back faster than buyers have, which is quietly tightening conditions even while sales volumes stay roughly flat year over year. What this means for you: if you're buying, you still have negotiating room in most segments, but that room is shrinking month by month, not growing. If you're selling, pricing realistically from day one matters more than ever, since overpriced listings are sitting. The Bank of Canada is holding steady — for now The Bank of Canada held its policy rate at 2.25% at its September meeting, continuing a pause that's given the market some breathing room after a turbulent few years. Most bank economists expect the rate to stay roughly in this range through the balance of 2026, though a few flag upside risk if trade-related inflation pressure builds. Fixed mortgage rates move independently of the policy rate — they track government bond yields — and those have been drifting up and down through the year on geopolitical and trade headlines. As of mid-September, the lowest advertised 5-year fixed rates in Ontario were sitting around the low-4% range. What this means for you: rate stability is good news for planning, but it's not a guarantee. If a rate holds well for your budget, locking it in rather than trying to time the bottom is often the more disciplined move. The renewal wave is the story to watch This is arguably the biggest theme in the mortgage industry right now. Over a million Canadian mortgages are coming up for renewal in 2026 — one of the largest renewal cohorts on record — and a meaningful share of these were originally signed back when rates sat between 1.5% and 2.5%. Even with today's more moderate 5-year fixed rates in the high-3% to low-4% range, many of these homeowners are looking at real payment increases. A few developments are softening that blow: OSFI's stress test change: as of the 2025 rule update, federally regulated lenders no longer need to re-apply the mortgage stress test to existing borrowers who renew and stay with the same lender. That's opened the door to more competitive switching, since borrowers changing lenders at renewal aren't boxed in the way they used to be. Lender switching is way up: uninsured borrowers switching lenders at renewal have increased sharply since that rule took effect, and renewal rates on switches have come down meaningfully compared to sticking with a default offer. Delinquency is rising, but from a very low base: mortgage delinquency balances are climbing, particularly in Ontario, but the share of mortgages seriously behind on payments (90+ days) remains small. This is stress showing up at the margins, not a system-wide crisis. What this means for you: if your renewal is on the horizon, the single most valuable thing you can do is start shopping 4 to 6 months out rather than waiting for your lender's letter to show up. The rules now favour borrowers who compare offers. Where does this leave buyers, sellers, and renewers? First-time buyers are still navigating affordability pressure, with the stress test's qualifying rate (contract rate + 2%, or 5.25%, whichever is higher) pushing max purchase prices down relative to income. Pairing with a co-borrower or exploring lenders outside the federally regulated stress test (credit unions, some monolines) can meaningfully change what you qualify for. Move-up and move-down buyers benefit from today's higher inventory and softer prices, especially in the GTA's condo and townhouse segments, where declines have been steepest. Renewing homeowners have more leverage than they did a few years ago, thanks to the stress test change on same-lender renewals and a genuinely competitive lender landscape for switches. Sellers need to price to the current market rather than the market of two years ago — homes are taking longer to sell, and overpricing shows up quickly in days-on-market stats. The bottom line Ontario's housing market isn't in free fall, and it isn't roaring back either — it's re-calibrating. Rates look more stable than they have in years, but the mortgage renewal wave means a lot of households are about to feel a payment adjustment regardless of where rates sit today. Whether you're buying your first home, weighing a move, or facing a renewal in the next year, the common thread is the same: shop early, compare real offers instead of assuming your current lender's number is the best one, and build in a buffer for payment changes rather than being surprised by them. Have a renewal coming up or questions about what this market means for your specific situation? Reach out and we can walk through your numbers together.