As economic pressures mount and interest rate expectations shift, a growing number of Canadians are taking a cautious approach to homeownership, according to the latest BMO Real Financial Progress Index. The study reveals that 67% of potential homebuyers are waiting for interest rates to decline before making a purchase—a slight decrease from 72% in 2024. Meanwhile, concern over a possible economic recession has risen sharply, jumping from 60% in March to 74% in April 2025.
“Canada’s housing market remained under pressure heading into the spring, with sales and prices both weakening further,” said Robert Kavcic, Senior Economist at BMO Capital Markets. “There is some clear underlying weakness as inventory builds and investors remain absent. Suffice it to say, homebuyers are losing confidence and motivation, especially in areas of B.C. and Southern Ontario.”
Key Findings from the BMO Survey
Interest Rates Driving Decisions:
Two-thirds (67%) of prospective buyers say interest rates significantly impact their purchasing decisions. Notably, 38% are holding out for rates to fall to 3% or lower, while 44% are uncertain about what rate would be acceptable to proceed with a purchase or refinancing.
Sentiment of Missed Opportunity:
Over half (56%) of prospective homeowners feel they’ve missed the right moment to buy, with Millennials (66%) expressing the most regret.
Declining Confidence in Attainability:
While 59% of Canadians still consider homeownership a top life goal, half believe it’s less attainable than a year ago. Two-thirds (66%) are less confident they’ll own a home in their lifetime compared to five years ago.
Homebuying Delayed:
Among the 38% who plan to purchase a home soon, only 14% aim to do so in 2025. A larger portion (24%) plans to wait until 2026 or later.
Relocation Considered:
More than half (52%) of aspiring buyers would consider moving to a different province or even country to afford homeownership.
New Trends in Homebuying Behavior
Financial Support from Family:
A significant number of current homeowners (43%) acknowledge they couldn’t have purchased without family assistance. Meanwhile, 27% of Canadians expect financial support from parents or grandparents, whether for a down payment, monthly rent, or renovation costs.
Generational Assistance Plans:
Among those planning to support the next generation, 5% intend to help with down payments and 4% will contribute to their children’s or grandchildren’s First Home Savings Account (FHSA).
Exploring Shared Ownership:
Amid affordability concerns, 45% of Canadians would consider co-owning a home with friends or family. This trend is most prominent among Gen Z (63%) and Millennials (50%).
Shifting Perspective on Renting:
A growing number of Canadians are content renting, with 61% saying they feel no pressure to buy. This view is especially prevalent among Boomers (83%) and Gen X (61%). Over half (51%) see renting as a more flexible lifestyle choice.
Despite Market Woes, Confidence in Personal Finances Remains
While the housing outlook remains uncertain, 70% of Canadians report feeling confident about their overall financial situation. However, financial anxieties persist: 82% worry about unexpected expenses, 81% about their general financial health, and 72% about housing costs.
“While current economic conditions present uncertainties and challenges, there are opportunities for Canadians to achieve the goal of homeownership with guidance and planning,” said Gayle Ramsay, Head of Everyday Banking Segment & Customer Growth at BMO. “Working with a professional advisor can help homebuyers navigate the environment and build a personalized plan focused on resilience and long-term stability.”
Tools to Support the Homeownership Journey
BMO continues to offer a range of tools to support Canadians in their homeownership aspirations:
- First Home Savings Account (FHSA): A tax-advantaged savings plan allowing contributions of up to $8,000 per year, with a lifetime limit of $40,000, combining the benefits of both RRSPs and TFSAs.
- BMO SmartProgress: An online education platform offering curated playlists on personal finance topics including homeownership, budgeting, and saving.
- Pre-Approval & Pre-Qualification: Homebuyers can apply online for mortgage pre-approval with a 130-day rate guarantee—the longest among major Canadian banks. Pre-qualification is also available with a soft credit check that doesn’t impact credit scores.
- Mortgage Renewal Tools: BMO provides personalized renewal rates 180 days in advance and tools to estimate future payments, available via app and online banking.
As Canadians face an evolving economic landscape, many are rethinking traditional approaches to homeownership, embracing flexibility, new financing models, and strategic planning.
