Apply Online

Alberta Housing Market Holds Steady — Even as Canada Slips Into Recession

August 8, 2025

Explore Calgary's stable housing market in 2025, offering unique opportunities for first-time buyers amidst economic shifts. Get insights now!
Calgary housing market holds steady amid economic uncertainty

By Josh Tagg, mortgage broker · Mortgages for Less with INDI Mortgage · Calgary, serving all of Alberta ·

Is 2025 a good year to buy your first home in Calgary? The headlines can feel overwhelming. Between trade disputes, a cooling job market, and changing interest rates, it’s easy to feel stuck on the sidelines unsure what decision to make, and when to make it.

The reality? The housing market is showing early signs of stability — even as Canada has slipped into a mild recession — and that could present unique opportunities for first-time buyers. Let’s break it down.

Quick answer: In August 2025, Oxford Economics said Canada was in a shallow recession driven by the U.S. trade dispute, with unemployment at 6.9% and expected to reach 7.6%. Housing held up anyway: July home sales in several major cities rose 9% and outpaced new listings, a sign prices had likely found a floor. Fixed rates were expected to stay elevated as bond yields rose, while the Bank of Canada’s 2.75% policy rate was expected to hold, with a cut or two possible if the economy weakened.
What happened next: The Bank of Canada cut its policy rate by 0.25% to 2.5% on September 17, 2025. Josh covered the decision in Bank of Canada Cuts Overnight Rate 0.25%.
9%
Jump in July home sales across several major cities
7.6%
Unemployment Oxford Economics expected (6.9% at the time)
4.0%
Canada 10-year bond yield forecast for 2027
2.75%
Bank of Canada policy rate, expected to hold

Is the housing market booming or just holding firm?

A couple at a kitchen table studying a printed house listing, a laptop showing a flat line chart, house keys and an orange notebook.
A flat market is not a bad one for a first purchase: when sales outpace new listings, prices are less likely to fall right after you buy.

In July, home sales in several major Canadian cities jumped 9%, with sales outpacing the number of new listings. That’s a sign the market has likely found its “floor” — meaning prices are less likely to drop sharply from here.

In Calgary, sales have remained steady while inventory has increased. But the broader national view is encouraging because stable market gives you a better chance to buy without worrying your home value will sink immediately afterward.

Is Canada in a recession?

Oxford Economics says Canada is already in a shallow recession, triggered by a trade dispute with the U.S. Here’s what’s driving it:

  • Tariffs and trade tensions → Fewer Canadian goods being sold to the U.S.
  • Manufacturing slowdown → Car exports, metals, and other industries are struggling.
  • Weaker job market → Over 40,000 jobs lost in June, with more losses expected.

They expect the economy to shrink slightly through the end of 2025, with unemployment possibly rising to 7.6% (it’s 6.9% now).

Could defence spending change the game?

The federal government has committed to a big increase in military spending — first to 2% of GDP this year, and then ramping up to NATO’s new 5% target by 2035.

This could boost economic growth in the longer term, but it will also be debt-financed, meaning government borrowing costs will rise. That matters because…

How do bond yields affect mortgage rates?

Rising government bond yields often mean higher fixed mortgage rates, since lenders use those yields to price their loans. Oxford now expects Canada’s 10-year bond yield to climb to 4.0% by 2027 (up from 3.84%). What does that mean for you?

  • Fixed mortgage rates may remain higher than we’ve seen in recent years.
  • Variable rates could hold steady for now — the Bank of Canada’s policy rate is expected to stay at 2.75% — but they might cut once or twice if the economy weakens further.

What happens if the U.S. tariffs go ahead?

If the U.S. follows through with threats to impose steep tariffs (up to 35%) on Canadian goods that don’t meet USMCA rules, the recession could deepen. That would likely mean:

  • More job losses
  • Slower economic growth
  • Possibly more pressure on the Bank of Canada to lower rates

What should first-time buyers do now?

The mix of a steady housing market and economic uncertainty can actually work in your favour — if you prepare. Here’s how:

  1. Get pre-approved now to lock in today’s rates before they change.
  2. Know your budget so you can act quickly when the right home appears.
  3. Work with a mortgage broker who can shop the market and explain the trade-offs between fixed and variable rates in this environment.

The Canadian economy may be facing challenges, but Alberta’s housing market is showing stability for the moment. For first-time buyers, this could be a window to enter the market before prices climb again. Reach out to me and we can talk it out.

How an Alberta mortgage broker helps when the economy is uncertain

You can’t control recessions, tariffs or bond yields. You can control how ready you are:

  • A pre-approval with a rate hold, so a rise in fixed rates doesn’t catch you mid-search.
  • A plain comparison of fixed vs. variable: fixed rates follow bond yields, variable rates follow the Bank of Canada.
  • A budget you can act on quickly when the right home comes up.
  • Rates shopped across multiple lenders for buyers in Calgary, Edmonton and the rest of Alberta.

Thinking about buying your first home?

Get pre-approved and know your numbers before the market moves.

Apply Online → Book a Discovery Call → Serving Calgary, Edmonton & all of Alberta · Mortgages for Less with INDI Mortgage

Questions about Alberta housing and the 2025 recession

Was Canada in a recession in August 2025?
Oxford Economics said Canada was already in a shallow recession, triggered by the trade dispute with the U.S. It expected the economy to shrink slightly through the end of 2025.
Was the housing market holding up during the recession?
Yes. In July 2025, home sales in several major Canadian cities jumped 9%, with sales outpacing new listings. That suggested the market had likely found its floor, so prices were less likely to drop sharply.
What was driving the slowdown?
Tariffs and trade tensions meant fewer Canadian goods sold to the U.S., manufacturing was struggling, and over 40,000 jobs were lost in June. Unemployment was 6.9% and expected to rise to 7.6%.
Why could defence spending push mortgage rates up?
The federal government committed to raising military spending to 2% of GDP, then to NATO’s 5% target by 2035. That spending is debt-financed, so government borrowing costs rise, and higher bond yields often mean higher fixed mortgage rates.
What did this mean for fixed and variable mortgage rates?
Fixed rates were expected to stay higher than in recent years, with Oxford forecasting Canada’s 10-year bond yield to reach 4.0% by 2027. Variable rates were expected to hold with the Bank of Canada at 2.75%, with a cut or two possible if the economy weakened.
What would steeper U.S. tariffs mean?
If the U.S. imposed tariffs of up to 35% on Canadian goods that don’t meet USMCA rules, the recession could deepen, bringing more job losses, slower growth and possibly more pressure on the Bank of Canada to lower rates.
What should first-time buyers do in an uncertain economy?
Get pre-approved to lock in a rate before it changes, know your budget so you can act quickly, and work with a mortgage broker who can shop the market and explain the trade-offs between fixed and variable rates.

This article was written on August 8, 2025, using economic forecasts and market data available at the time; the September 17, 2025 rate decision was added later. Rates, market conditions and lender policies change. This is general information, not financial advice; please speak with a licensed mortgage professional about your specific circumstances. Mortgages for Less with INDI Mortgage.

Did you find that useful? Check out this related information!