This week: Another interest rate hold might help would-be buyers come off the sidelines, but war and economic volatility still have an effect as February home-sales dip to multiyear lows. Plus, a brief period of increased housing affordability might already be over, Canada has a second-time buyer problem and one property worth a look.

This week’s interest rate hold by the Bank of Canada is welcome news for would-be buyers waiting on the sidelines and variable-rate mortgage-holders looking for certainty, Coldwell Banker Canada chief executive Karim Kennedy told Salmaan Farooqui. The central bank’s third straight decision to hold the key rate at 2.25 per cent sends a message of predictability and stability as volatile economic forces weigh on consumer confidence.

The evolving conflict in the Middle East adds to the U.S. tariff-fuelled economic uncertainty that analysts say has kept Ontario and B.C. markets from bouncing back amid declining interest rates. In February, home sales fell further – 1.3 per cent month-over-month – to multiyear lows as steep fixed mortgage rates and bitter weather exacerbated the soft market, according to new data from the Canadian Real Estate Association.

While Kennedy says it’s too early for house-hunters to worry about potential future rate hikes, the potential for a drawn-out war in Iran is already making them even more nervous to take the plunge. Read more about what the rate decision and war mean for mortgage rates.

After home sales dipped to new multiyear lows in February, Canada’s sluggish housing market is trying to wake up for the spring selling season. But, as Erica Alini writes, “young prospective homebuyers would be justified to remain in a state of prolonged hibernation.”

A mix of softer prices and, later, falling interest rates has made homes more affordable in the last two years. But we are still nowhere near close to pre-pandemic affordability and, condos aside, homeownership remains far more expensive than it was during the last housing boom.

To make matters worse, the Iran war likely means “this era of somewhat-better-but-not-nearly-good-enough affordability may be almost over already,” Erica writes. Less than three months into the year, economists predict affordability will only improve marginally. “Most of that improvement is likely behind us,” RBC economist Rachel Battaglia told Erica. Take a closer look at the data and where affordability is headed in Canada.

Rates shown are the lowest available for each term/type and category (insured vs. uninsured) as of market close on Thursday, March 19.

Many younger Canadians who purchased their “starter homes” to get on the property ladder are finding out the next rung is painfully out of reach. As governments have focused on badly needed help for first-time buyers in the past decade, Mike Moffat argues they are failing to see the hurdles keeping second-time buyers trapped in homes they have outgrown.

Picture a middle-class couple in their late 20s to early 40s, who either have children or would like to. They purchased a condo in the last 10 years, perhaps for as low as $200,000 in Toronto, with plans to live in it, build equity off their down payment (potentially as low as $10,000) and then sell it when the time was right to move into a family home. But unfortunately for them, that game has changed, particularly in the most expensive areas like the GTA or B.C.’s Lower Mainland. “It required condo prices to rise, and with family-sized home prices also rising quickly, even a six-figure gain could not guarantee a larger home, at least in the GTA,” Mike writes.

It’s an unintended consequence of federal measures – like the mortgage stress test and required down payment levels for homes over $500,000 – introduced to cool home-price growth, and one that Mike argues governments need to urgently address. “The most immediate thing they can do is extend the HST waiver on new homes to all buyers – not just first-time ones – who intend to use the home as their primary residence," he writes. Read the full column here.