Housing Affordability Strain Reinforces Case for Bank of Canada Rate Cuts, Rosenberg Research Says

10:37 AM EDT, 06/24/2026 (MT Newswires) -- Demand from prospective first-time home buyers remains very weak, with affordability constraints and barriers to down payments keeping many out of the market, said Rosenberg Research on Wednesday.

More than half of non-homeowners in Canada have no plans to buy in the next 12 months, noted Rosenberg Research, citing a poll reported by the National Post.

Housing affordability is about 20% weaker than its long-term average, most notably for younger buyers, implying further downward pressure on prices unless policy becomes more supportive, said Rosenberg Research in a note. This raises the likelihood of BoC easing if housing softness weighs on financial conditions.

"The thing is -- if home prices continue to deflate, the pressure will be on the central bank to kickstart its easing campaign," said Rosenberg.

Mortgage rates have failed to ease in line with BoC policy, with the five-year average still around 5.13% and supported by higher global bond yields, especially U.S. Treasuries, according to Rosenberg.

With Canadian households still heavily indebted and financial stress indicators edging higher, the balance of risks suggests Canada's central bank is more likely to cut rates than raise them next, added Rosenberg.

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