When Jay Lewis and I sat down to record a video on September 8th, the Bank of Canada’s upcoming rate announcement was top of mind. At the time, the chances of a cut on September 17th had jumped from just 35 per cent two weeks ago to an overwhelming 85 per cent. That’s almost a sure thing for a quarter-point rate drop, with expectations for another cut by December and possibly more by April.
For Edmonton’s first-time home buyers, this is big news. Lower interest rates mean more affordable mortgages—but the reasons behind these cuts are a mix of what I call “the big bad thing” and “the big good thing.”
The Big Bad Thing: Unemployment at Its Highest Since COVID
“The employment data came out for August and… we saw unemployment hit the highest level it has since August of 2021,” I explained in the video. Canada’s unemployment rate now sits at 7.1 per cent, the highest since the height of the pandemic.
Ontario has been hit hardest, with Windsor, Oshawa, and Toronto topping the list at 11, 9, and 8.9 per cent unemployment respectively. While Alberta hasn’t escaped the downturn, the bigger concern is what this data means for rate policy.
“We don’t really want unemployment to be the reason the Bank of Canada needs to cut its rates,” I added. “It’s only good for those of us who are working, those of you who are well qualified for a mortgage and could benefit from the lower rates that come with it. But this isn’t something that we’re cheering about.”
The Big Good Thing: Inflation is Cooperating
On the brighter side, inflation is moving in the right direction. “Inflation seems to be cooperating,” I said. “It’s staying at three and under three per cent. The total CPI inflation is actually under two per cent.”
A key factor here is trade. With Canada dropping some counter-tariffs on imports, we’ve seen relief on consumer costs and renewed trade negotiations. That gives the Bank of Canada more breathing room to cut rates without fuelling runaway inflation.
What This Means for First-Time Home Buyers in Edmonton
For those of you looking to buy your first home in Edmonton, these shifts could open a window of opportunity. Falling bond yields are already putting downward pressure on fixed mortgage rates, and with the Bank of Canada expected to act, borrowing could become more affordable in the months ahead.
But as I reminded Jay during our conversation, the bigger picture matters. Rate cuts help qualified buyers, but they’re being driven by economic challenges like job losses. If you’re considering a purchase, it’s worth sitting down with a mortgage broker who can guide you through what these changes mean for your situation.
Watch the Full Conversation
Jay and I dive into these details—and what to watch for next—on our YouTube channel. You can view the full video here: Edmonton Home Team
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