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Canada’s Housing Market For January: A Glimpse into 2024

Canada Housing and Mortgage Market Review january 2024

As we embark on a new year, the Canadian housing and mortgage landscape is showing signs of significant transformation. This article delves into the insights from the latest Housing and Mortgage Market Review by Mortgage Professionals Canada, providing a comprehensive outlook for 2024.


Inflation in canada heading into 2024

Economic Indicators and Their Impact

Entering 2024, Canada’s economy demonstrates a clear trend towards deceleration in inflation, with the Bank of Canada poised to adjust the overnight rate downwards by a full percentage point throughout the year. This adjustment is a response to a decelerating inflation trend and a population growth that has shattered records, increasing by 1.2 million people or 3.2% in the past year, nearly five times the OECD average.

The end of 2023 saw the national inflation rate slightly uptick to 3.4% in December from 3.1% in November, amidst signs of economic slowdown. The GDP contraction by an annualized rate of -1.1% in Q3 and a rise in the unemployment rate to 5.8% signal a cautious economic environment. However, the anticipated rate cuts from April 2024 suggest a potential revival in consumer confidence and mortgage market activity.


mortgage rates in canada

Anticipated Rate Cuts and Their Influence on the Mortgage Market

The landscape of Canada’s mortgage market is dynamically adjusting in response to the anticipated monetary policy shifts. As the central bank signals potential rate cuts in 2024, we’re observing a significant impact on fixed mortgage rates, which have declined by approximately 70 basis points from their peak in October. This adjustment reflects the market’s response to the changing economic indicators and the central bank’s forward guidance.Despite a recent uptick in bond yields, which traditionally influence fixed mortgage rate pricing, there has been a noticeable pause in the rising trajectory of mortgage rates. This pause is interpreted as a temporary stabilization, laying the groundwork for what many market analysts predict will be a continued decline in mortgage rates. The bond market’s initial reaction to the anticipated rate cuts has been swift, underscoring the sensitivity of mortgage rates to broader economic policies and investor sentiments.The potential for lower mortgage rates is a beacon of hope for prospective homeowners, signaling a shift towards improved affordability in the housing market. This shift is particularly significant in a landscape where affordability has been a pressing concern for many Canadians. As fixed mortgage rates begin to align more closely with the anticipated downward adjustment in the Bank of Canada’s overnight rate, the door opens wider for first-time buyers and those looking to refinance at more favorable rates.Moreover, the responsiveness of the mortgage market to these anticipated rate cuts highlights the importance of forward-looking monetary policy as a tool for stabilizing and stimulating the housing sector. By providing clear signals about future rate movements, the Bank of Canada plays a pivotal role in shaping consumer expectations and confidence. This, in turn, has a direct impact on the demand for mortgages and can help to invigorate the housing market at a time when economic indicators suggest a cautious approach.As we move further into 2024, the continued monitoring of economic trends, inflation rates, and bond yields will be crucial in determining the exact trajectory of mortgage rates. However, the current trend towards lower rates is a positive sign for the Canadian housing market, offering a window of opportunity for those looking to enter the market or secure more affordable financing options.


Real estate prices in canada over last 15 years

Market Dynamics: Sales and Prices

The final quarter of 2023 witnessed a 6.2% drop in national home sales, with significant declines in British Columbia and Quebec. Despite this, a surge in sales activity in December hints at a resilient market poised for recovery. This rebound is further supported by the sales-to-new listings ratio climbing to 58% in December, indicating a shift towards a more balanced market.

House prices ended the quarter 3.8% lower, reflecting a market adjustment. However, with mortgage rates declining and a robust population growth fueling demand, a stabilization in prices is anticipated as we progress into 2024.


Loan Growth and Mortgage Originations: A Slow Recovery

Mortgage growth remains subdued, with a mere 0.25% increase in November and a 3.4% rise over the past year, marking the slowest annual growth since 2001. Despite a year-over-year drop in mortgage originations in November, an uptick in variable rate loans suggests borrowers are preparing for future rate cuts, potentially revitalizing the mortgage demand in 2024.


Challenges and Opportunities Ahead

The Canadian housing market is navigating through a period of transition, influenced by evolving economic indicators, mortgage rate adjustments, and significant population growth. These factors present both challenges and opportunities for buyers, sellers, and investors alike.

As mortgage rates are expected to decline, coupled with ongoing population growth, the market dynamics suggest an impending improvement in affordability and demand. However, the construction sector’s slow response to the burgeoning population increases the risk of a supply crisis, particularly for single-family homes.



The year 2024 holds promise for Canada’s housing market, with signs pointing towards recovery and stabilization. Key factors such as the anticipated decrease in mortgage rates, robust population growth, and a potentially balanced market create a fertile ground for a resurgence in housing demand. Stakeholders in the Canadian housing market would do well to monitor these trends closely, as they navigate through an evolving landscape marked by both potential headwinds and opportunities.




Josh Tagg has been the owner of Mortgages For Less since 2006. During that time Josh has developed a reputation for being an industry leader and advocate for client education.


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