Mortgage Minute: December 5, 2025
Is the Toronto housing market broken, or is it just sleeping? And… did you notice that fixed mortgage rates just went up?
We are closing out the year with a strange mix of signals. Prices are softening, buyers are nervous, and the bond market just threw us a curveball.
Here is your “Mortgage Minute” breakdown for the week of December 9th—the three stories that actually matter to your wallet right now.
1. The “Toronto Freeze” is Deepening
The November numbers are in, and they paint a picture of a market in hibernation.
- Sales are down: Toronto home sales plunged nearly 16% compared to this time last year.
- Prices are slipping: The average selling price has dipped by 6.4%.
- Condos are hurting: The condo sector is taking the biggest hit, with sales plummeting nearly 22%.
Why is this happening? For months, we thought buyers were just waiting for lower interest rates. But a new poll reveals a deeper issue: Job Stability. Nearly half of potential first-time buyers say they are delaying their purchase because they are worried about their employment and the economy.
Buyers aren’t just priced out; they are “confidence out.” They are sitting on their hands, waiting for certainty.
2. The Rate Surprise (The Plot Twist)
If you are sitting on the sidelines waiting for rates to hit bottom, you need to pay attention to this.
Even though the Canadian economy feels weak, Fixed Mortgage Rates actually went UP this week.
Why? It wasn’t because of anything that happened in Canada. It was driven by global bond markets reacting to a signal from the Bank of Japan that they might raise rates. When global bond yields rise, Canadian fixed mortgage rates often follow suit—regardless of what our economy is doing.
What about Variable Rates? Don’t bank on a cut next week. Most economists now predict the Bank of Canada will HOLD rates steady on December 10th. Why? Because our Q3 GDP numbers came in stronger than expected (2.6%), meaning we officially dodged a recession.
3. The Future Supply Crisis (The Warning)
While nobody is buying today, the scary part is that nobody is building for tomorrow either.
- Construction is stopping: National housing starts dropped 17% last month.
- The Watchdog Warning: The government’s own financial watchdog (The Parliamentary Budget Office) just issued a report warning that federal housing spending is set to drop by 56% over the next four years as current programs expire.
This may create a “Future Squeeze.” We are under-building right now. When consumer confidence returns (and it always does) and rates eventually settle, we are going to face a massive supply shortage in 2026 and 2027.
The Bottom Line
We are in a unique window. The “Toronto Freeze” means you have no competition and prices are lower than they have been in a long time. But the “Supply Squeeze” means this inventory won’t last forever once the market wakes up.
The “bottom” of the market is impossible to time perfectly. But buying when everyone else is scared—and securing a home before the supply crunch hits—is usually a winning strategy.
Want to run the numbers? If you want to see what a “Recession-Proof” budget looks like for your family, reach out. Let’s build a strategy that works for you.