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BMO Survey: How rising recession concerns among Canadians are sidelining prospective homebuyers

May 5, 2025 | Thought Leadership

The latest BMO Real Financial Progress Index reveals that while over two thirds (67%) of homebuyers are waiting for interest rates to drop before purchasing a home – a 5% decrease from 2024 – experts say many more Canadians may take a “wait and see” approach as concerns about the prospect of an economic recession increased from 60% to 74% from March to April 2025. 

“Canada’s housing market remained under pressure heading into the spring, with sales and prices both weakening further. 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.” 

– Robert Kavcic
Senior Economist, BMO Capital Markets

The BMO survey examines how concerns about the economy have influenced Canadians’ homebuying decisions: 

  • Revisiting rates: Over two-thirds (67%) of prospective homeowners believe rates affect their buying decisions. Two in five (38%) Canadians are waiting for rates to drop to 3% or lower before purchasing or refinancing a home. In addition, 44% admit they are unsure about the rate they would be comfortable with to move forward with buying or refinancing their home. 
  • Missed momentum: When looking at the current housing market, 56% of prospective homeowners feel they missed their moment to buy a home. Two-thirds (66%) of Millennials feel they had missed their homebuying moment – more than any other generation. 
  • Challenged confidence: While 59% of Canadians believe homeownership is one of their greatest life aspirations, half (50%) believe owning a home is less attainable than it was 12 months ago, and two-thirds (66%) are less confident that they will own a home in their lifetime compared to five years ago. 
  • Deferred demand: Among the 38% of homebuyers planning on purchasing a home in the near future, only 14% plan to in 2025, and a quarter (24%) plan on doing so in 2026 or later. 
  • Location, location, location: More than half (52%) of aspiring homebuyers would consider moving to a different province or country in order to afford buying a home. 

“While current economic conditions present uncertainties and challenges, there are opportunities for Canadians to achieve the goal of homeownership with guidance and planning. Working with a professional advisor can help homebuyers stay informed and navigate the current environment, understand the strategies available, then develop a personalized plan that prioritizes resilience and long-term stability, empowering them to pursue homeownership while making real financial progress.” 

– Gayle Ramsay
Head, Everyday Banking Segment & Customer Growth, BMO

Despite short-term concerns about the housing market, the BMO Real Financial Progress Index found that over two thirds (70%) of Canadians feel confident in their financial situation, but fear of unknown expenses (82%), concerns about their overall financial situation (81%) and housing costs (72%) are among the leading sources of financial anxiety. 

Reimagining the Canadian dream 

While 57% of homebuyers believe homeownership is more about attaining a life milestone than making a good investment, many are re-evaluating their approach to homebuying:  

Bank of mom and dad: 

  • 43% of homeowners say they could not have purchased their home without assistance from family. 
  • Over a quarter (27%) of Canadians expect financial support from their parents and/or grandparents, with 6% expecting assistance for the down payment for a home, 8% expecting help with monthly rent and 7% expecting support for home renovation costs. 
  • Among the 39% who plan to provide financial help for their child(ren) and grandchild(ren), 5% plan to contribute to the down payment for their home and 4% plan to contribute toward their First Home Savings Account (FHSA). 
  • Shared homeownership: 45% would consider buying a home with friends, family members or other people they are not romantically involved with, with Gen Z (63%) and Millennials (50%) being the mostly likely to consider a shared homeownership approach. 
  • Reconsidering renting: 61% of Canadians are content renting and do not feel pressured to buy a home, a sentiment highest among Boomers (83%) and Gen X (61%). Over half (51%) of Canadians believe renting is more flexible. 

“While homeownership continues to represent financial progress for many, we are finding Canadians are beginning to explore new and different pathways to meet their goals as economic uncertainty grows and priorities shift,” said Gayle. “As many first-time homebuyers explore new options or wait for their chance to enter the market, we encourage Canadians to work with a professional advisor or planner to learn more about the different paths to homeownership and build a personalized financial plan them get into the home they want within a realistic timeline.” 

To learn more about how BMO can help customers make financial progress, visit www.bmo.com/main/personal.

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