Most major Canadian banks do not expect a rate cut in July. The overnight rate currently sits at 2.75%, and strong employment numbers along with persistent core inflation are keeping the Bank of Canada cautious.
Here’s what Canada’s big banks are forecasting:
- RBC: No more rate cuts in 2025. Hold at 2.75%.
- TD, CIBC, BMO, National Bank: Expect two rate cuts (totaling 0.50%) before year-end.
- Scotiabank: More conservative, projects no cuts until 2026.
Market sentiment also suggests that while July will likely be a hold, there’s growing expectation for a 25–50 basis point rate drop in the final quarter of 2025.
Projected Rate Cuts: What’s Coming Over the Next 6–12 Months?
Economists and mortgage market analysts suggest we could see the overnight rate drop to around 2.25% by early 2026, assuming inflation continues to trend downward.
What this means for you:
- Lower variable mortgage rates
- Improved affordability for homebuyers
- Easier mortgage qualification, especially for first-time buyers
- Less pressure for owners facing renewals
This shift could have a direct impact on Fraser Valley home sales, which have been soft since late 2021.
What This Means for Fraser Valley Real Estate
The Fraser Valley housing market, including cities like Abbotsford, Langley, Mission, and Chilliwack, has seen reduced sales activity for almost three years. Rising interest rates and affordability challenges caused many buyers to step back — but that doesn’t mean they disappeared.
Here’s what’s brewing beneath the surface:
- Pent-up demand is real — many would-be buyers are simply waiting for the right moment.
- Consumer confidence remains fragile, but it’s poised to rebound with any sign of economic stability.
- Inventory levels remain healthy, giving buyers options once they return to the market.
If the Bank of Canada signals even modest rate relief, it could shift the momentum quickly.
Final Thoughts: What Should Buyers and Sellers Do Now?
If you’re a homebuyer in the Fraser Valley, now is the time to get pre-approved, even if you’re not ready to jump in just yet. If rates drop and confidence returns, you may be competing with a lot more buyers.
If you’re a home seller, especially in the detached or townhome segment, late summer to fall 2025 may bring more interest than we’ve seen in recent quarters. Pricing and preparation will be key to capitalizing on returning demand.
Key Takeaways
- Bank of Canada’s next rate decision is July 30, 2025 — no cut expected this round.
- Most banks predict 0.50% in rate cuts by early 2026.
- Fraser Valley market could see renewed interest as affordability improves.
- Buyer confidence may return as rates ease, unlocking stalled demand.
Want updates on how this could affect your property value or purchase plans in Abbotsford, Langley, or Chilliwack?
Reach out today for a customized strategy based on your goals and local market trends.