House hunting in a trade war? What Bank of Canada’s rate cut means for you

The Bank of Canada cut its benchmark rate by 25 basis points, bringing it down to 2.75 per cent. Experts say the outlook for the housing market remains hazy.

The outlook for Canada’s housing market remains uncertain after the Bank of Canada cut its key interest rate on Wednesday amid what it calls “pervasive uncertainty” around the trade war imposed by the U.S.

The central bank cut its benchmark rate by 25 basis points, bringing it down to 2.75 per cent.

This was the bank’s seventh consecutive interest rate cut.

While announcing the rate cut, Bank of Canada Gov. Tiff Macklem said the uncertainty around tariffs was forcing Canadians to cut back on spending.

“In recent months, the pervasive uncertainty created by continuously changing U.S. tariff threats has shaken business and consumer confidence. This is restraining household spending intentions and businesses’ plans to hire and invest,” he said.

Clay Jarvis, a mortgage expert at NerdWallet Canada, said while a March rate cut is typically good news for the spring housing market, it is hard for Canadian homebuyers to have confidence right now.

“A March rate cut from the Bank of Canada would usually act as fuel for the spring housing market, but it’s hard to start a fire when the economy is soaked through with uncertainty,” Jarvis said.

He added, “Home buyers have had access to both shrinking rates and rising inventory this year, but many are lacking the confidence to go through with a purchase. No one knows what’s going to happen with tariffs. They could wind up decimating several industries. It’s hard to sign up for a mortgage when you don’t know if you’ll have a job later this year.”