There’s often a lot of hope that lower interest rates will make homeownership more affordable, but research from Canada’s central bank highlights a different reality. When rates drop, housing demand responds quickly—resales start climbing almost immediately, with the full effect showing up 18 to 24 months later. Yet, new home construction (housing starts) doesn’t catch up until about two years after the initial cuts. If the job market is strong, people feel even more comfortable buying, which amplifies demand further. Builders eventually respond because higher prices and easier financing make new projects possible, but planning and approvals—especially for multi‑unit homes—take significant time. In short, rate cuts may eventually bring more homes to market, but they don’t solve affordability right away, since supply lags far behind demand. As someone who helps clients navigate these shifts, I believe in staying focused on clear, strategic financing options that serve your long‑term goals—even as the market reacts to changing rates.
Leave a Reply