Rising Homebuying Intentions Amid Economic Uncertainty
Homebuying on the Rise
Even as nearly half of Canadians anticipate a recession in 2025, the latest Bank of Canada consumer sentiment survey reports a surprising increase in homebuying intentions. According to the Q4 survey, 22.4% of Canadians believe there’s a greater than 50% chance they’ll move to a new primary residence within the next year – up from 21.1% in the previous quarter.
Notably, 19.9% of renters are considering homeownership in the next 12 months, compared to 16% in Q3. The Bank of Canada attributes this growth to expectations of further interest rate cuts in 2025 and improving credit conditions.
Inflation Expectations Stabilize, Spending to Increase
The survey also revealed a positive shift in inflation expectations. While consumers still anticipate rent increases, the overall inflation outlook has eased to pre-pandemic levels. This has spurred intentions to increase spending on essentials and housing for the first time since 2021, with many feeling more confident about their financial health.
Challenges Persist Despite Optimism
While homebuying intentions and spending are on the rise, uncertainty about the economy remains significant. Nearly 47% of Canadians foresee a recession, and concerns over job security persist, especially among younger demographics and those with less education.
Businesses, too, are cautious, with mixed sentiments about future growth. Despite this, investment intentions, particularly in the energy sector, show promise for 2025.
Original Article – Canadian Mortgage Trends – January 20, 2025
