Toronto home sales increased by 10% in January as buyers took advantage of lower mortgage rates.
TRREB forecasts that home sales in 2025 will be 12.4% higher than in 2024, a year marked by high borrowing costs that made mortgages harder to secure. The Bank of Canada's decision to cut interest rates six times since June has led to a decrease in the average five-year fixed mortgage rate, now just above 4%, compared to around 5% a year ago.
TRREB's chief market analyst, Jason Mercer, noted that more homebuyers are expected to take advantage of these lower borrowing costs. However, he cautioned that the positive effects of lower mortgage rates might be offset temporarily by the potential impact of trade disruptions on the economy and consumer confidence.
The looming U.S. tariff risks have created some uncertainty. Although the U.S. had initially planned to impose 25% tariffs on most Canadian goods, it was announced that there would be a 30-day postponement on February 1, leaving the full impact on buyer sentiment unclear.
Despite this, home sales in January saw a significant increase. TRREB reported 5,971 home sales in the Toronto region, a 10% rise from December. New listings also saw a 26% jump compared to the previous month. Home prices remained relatively stable, with the typical home price standing at $1,089,300.
TRREB's survey indicated that home-buying intentions in 2025 are similar to last year. 28% of respondents said they were likely to purchase a home, and the board projects a 2.6% increase in the average home price this year, with single-family homes seeing a steeper rise compared to condos. The forecast suggests that lower borrowing costs and ample housing supply will improve affordability, encouraging more buyers to enter the market.
Contact me if you are planning to buy or sell your home this year.