Interest rates may have peaked – is it time to jump into the housing market?

The Bank of Canada's shift in tone on future interest rate decisions could have some would-be homebuyers taking a look at the spring housing market, experts say.

After the Bank of Canada on Wednesday gave its clearest hints yet that its interest rate cycle might have peaked, some real estate experts are expecting hope for lower borrowing costs will set up a busy spring housing market.

The Bank of Canada held its benchmark interest rate at 5.0 per cent for the fourth consecutive time on Wednesday, with governor Tiff Macklem saying that conversations at the central bank have shifted from whether rates need to rise higher to how long they need to stay at current levels.

Macklem was asked by reporters for a timeline for rate cuts, but he pushed back, arguing he didn’t want to give Canadians a “false sense of precision.” The bank’s rate path is still dependent on inflation, with additional hikes not off the table if price pressures reignite.

Many economists said, however, that the Bank of Canada’s shift in tone away from emphasizing the need for future tightening is in line with calls for interest rate cuts to begin sometime in the spring or summer of this year.

Phil Soper, CEO of Royal LePage, tells Global News that Wednesday’s widely expected hold and the communications from the central bank solidify the national real estate brokerage’s forecast for a modest rebound in the housing market this year.

“We believe this will provide Canadians with more comfort that home prices in their city have stabilized and the next step will be a return to home price appreciation,” he says.

After more than a year of housing correction tied to the Bank of Canada’s rapid rate hike campaign that began in March 2022, there are already signs of life in the Canadian housing market.

December’s home sales figures showed an uptick in activity to end 2023, with market watchers pointing to warmer weather and a pullback in borrowing costs driving deals before the end of the year.