The Bank of Canada Held Rates at 2.25% for a Seventh Straight Time. Here's What It Does to Fall Inventory.

The Canadian Real Estate Association's August report landed with four consecutive months of sales growth, a streak longer than most agents have seen since early 2024. That momentum happened before the Bank of Canada confirmed its seventh straight hold at 2.25% on September 2. Now the September and October selling season, historically the second-strongest window of the year, arrives with something the market hasn't had in two years: certainty about the rate floor.

Inventory levels tell the story more clearly than sales figures. Toronto's active listings reached 24,482 in August, down 11% year-over-year. Vancouver's supply fell 3% over the same period. Calgary, which spent most of 2024 and 2025 in a supply crunch, now carries a 3.9-month inventory, up substantially from earlier years and the first time it has crossed three months since late 2023. The hold doesn't change those numbers directly. What it changes is how buyers and sellers interpret them.

Why the Seventh Hold Matters More Than the First Six

The Bank of Canada has now held at 2.25% for seven consecutive decisions. The pattern has shifted from tentative to conclusive. Buyers who have been waiting for the absolute bottom now face a choice: lock in a five-year fixed mortgage in the low-to-mid 4% range, or wait for a cut that may not arrive until mid-2027. That shift, from questioning whether rates will go lower to accepting that this is likely the floor, matters more for buyer psychology than the actual rate level.

Variable-rate mortgages, which surged in popularity during the 2020-2021 period, now represent about 18% of new originations, down from nearly 50% in early 2022. The hold reinforces that trend. Why take the risk of a variable product when the BoC has signalled it's comfortable here? Fixed products at 4.2% offer certainty. In a volatile macro environment, trade tensions, shifting U.S. Federal Reserve policy, energy price swings, certainty has a premium.

The Fall Window and the Inventory Question

September and October typically see a secondary sales peak as families finalize moves before winter. The question this year is whether the current supply increase meets rising demand or gets overwhelmed by it. If sales continue growing for a fifth and seventh month, Toronto's -11.3% inventory decline disappears quickly. A balanced market, where neither buyers nor sellers hold clear leverage, sits around 4 months of supply. Toronto is currently at 4.8 months. Vancouver is at approximately 8 months. One strong September erases the surplus.

Calgary presents a different case. The city has added jobs faster than housing units for three years. Even at 3.9 months of inventory, it remains a seller's market by national standards. The hold doesn't flood Calgary with new listings. It just keeps the existing pace steady. Builders who were waiting for rate cuts to justify new project starts now face the reality that 2.25% is the backdrop for the next six to twelve months. Start now or wait another year.

The counterpoint is affordability. A household earning $120,000 can qualify for roughly $585,000 at current rates and stress-test rules. Benchmark home prices in major markets remain well above that threshold, with Toronto's overall benchmark at $926,000 and Vancouver's composite benchmark at approximately $1.08 million. The rate hold doesn't solve that gap. What it does is prevent the gap from widening further if the BoC had hiked in response to international risks.

Four months of sales growth preceded this hold. If that growth extends through October, the fall market won't be about inventory levels. It will be about how fast the available inventory moves.