Aspiring homebuyers waiting for interest rates to fall might want to think about coming off the sidelines given the Bank of Canada ‘s hawkish tone during its latest i nterest rate decision , says the head of Royal LePage Real Estate Services .

The central bank on Wednesday held interest rates for the fourth consecutive time at 2.25 per cent, but said that if energy prices remain high and bleed into inflation and inflation expectations, then it may be forced to hike rates more than once.

“(The) governing council is looking through the war’s immediate impact on inflation, but will not let higher energy prices become persistent inflation,” Bank of Canada governor Tiff Macklem said. “As the outlook evolves, we stand ready to respond as needed.”

For homebuyers, that could mean the window is closing on getting a hoped-for better deal on mortgage rates.

“With inflation pressures resurfacing, the Bank of Canada has no room to lower interest rates further — and the next move could be upward,” Phil Soper, chief executive of Royal LePage, said in a press release.

The consumer price index (CPI) accelerated to 2.4 per cent from 1.8 per cent year over year in March, driven by higher oil prices and economists forecasted the CPI to hit three per cent before cooling on the expectation that the war in Iran will end sooner rather than later.

Core inflation has remained near the Bank of Canada’s two per cent target, and its recent Business Outlook Survey indicated that shorter-term inflation expectations had risen, something the central bank said it is watching since rising inflation expectations can morph into higher prices.

Soper said homebuyers should think about locking in a pre-approved mortgage rate, especially since they can expire, to mitigate some of the pressure of possible hikes.

“As that reality sets in, we expect more buyers to come off the sidelines through the spring and summer months,” he said.

Royal LePage said the brokerage isn’t expecting a huge wave of buyers.

“There’s a segment of buyers who have been sidelined, who are not unable to buy, but they really haven’t been buying,” Anne-Elise Cugliari Allegritti, vice-president of research and communications at Royal LePage, said. “There has been this possibility that lending could get cheaper, and so why buy today when I can buy next month? That mentality is probably shifting now.”

She said that based on the amount of housing for sale, “some of them could come to the market this spring and summer because they’ll just be at that point where, well, there’s nothing really to wait for.”

Canada’s housing market has been in a tailspin, with national average housing prices down nearly 19 per cent in March from the post-pandemic peak in February 2022, according to the Canadian Real Estate Association (CREA). Earlier this month, it cut its outlook for sales and prices for 2026 after the war in Iran led to a spike in mortgage rates.

CREA said it expected higher mortgage rates would deter people from jumping into the housing market if they had been thinking about it.

Housing affordability has improved, according to the Royal Bank of Canada, but from dismal levels.

RBC ‘s long-running affordability tracker estimated that aggregate homeownership costs chewed up 52.3 per cent of a median household’s income in the final quarter of 2025, down from an index high of 63 per cent in the fourth quarter of 2023, but well off the long-term average of 41.7 per cent.

However, it looks like any improvement in affordability may have run its course with Bank of Canada rates on hold and home prices starting to rise in certain cities across the country, RBC Economics said in a report that came out at the end of March.

Others were less optimistic about a pickup in activity.

Canada’s fixed-rate mortgages are more influenced by bond rates, while changes in the Bank of Canada rate impact variable-rate mortgages more directly, Victor Tran, a Rates.ca mortgage and real estate specialist, said in an email

Homebuyers are showing more interest in fixed-rate mortgages for “the stability,” he said, so he doesn’t think the threat of a hike will have a long-term impact.

“This (Bank of Canada) hold is unlikely to jump-start the housing market,” he said, adding that homeowners looking at a mortgage renewal are locking in rates before they rise any further.

Tran also said he believes three per cent rates are done and dusted for now.

“It’s not likely that we will see rates for conventional unsecured mortgages in the high three per cent range for quite some time,” he said.

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The Bank of Canada held its policy interest rate at 2.25 per cent on Wednesday for the fourth consecutive time, a move widely expected by economists amid soaring energy prices brought on by the conflict in the Middle East.

“Canada is being buffeted by global events and geopolitical uncertainties, but our economy is growing and is expected to grow,” Bank of Canada governor Tiff Macklem said in prepared remarks. — Paula Tran, Financial Post

Read the full story here.

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Today’s Posthaste was written by Gigi Suhanic with additional reporting from Financial Post staff and Bloomberg.

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