Canadian Job Market Slows—Rate Cuts Likely, Real Estate Could Shift Too
The latest jobs report is out, and it adds more pressure on the Bank of Canada to cut interest rates again—possibly a
s soon as their next meeting.
Employment in May barely budged—up just 8,800 jobs—while the unemployment rate ticked up to 7.0%, the highest we've seen since 2016 (excluding the pandemic years). This marks the third straight month of rising unemployment. Sectors tied to trade, manufacturing, and government saw noticeable job losses. Even self-employment fell sharply.
Meanwhile, the U.S. job market, though still growing, is also starting to show signs of strain. Together, these trends point to a cooling economic environment across North America.
What does this mean for mortgage rates?
The Bank of Canada is clearly in easing mode, and softer labour data makes a strong case for another rate cut soon. If you’re considering a purchase, refinance, or renewal, it’s a good time to start planning—especially if rates drop further this year.
And what about real estate prices and supply?
In real estate, falling rates can spark more buyer activity—but that’s not the whole story. If economic uncertainty persists and unemployment continues rising, some homeowners may feel pressure to sell. This could gradually increase inventory levels, particularly in more rate-sensitive segments like condos or entry-level homes.
That said, markets like ours—where demand remains strong in desirable neighbourhoods—are more resilient. In the near term, rate cuts may help keep prices supported, especially if buyer confidence picks up. But if job losses spread and consumer sentiment weakens, we could see a more balanced or even softer market in the months ahead.
If you’re thinking about making a move, the next few months will be important to watch. As always, I’m here to help you interpret the data and make smart, well-timed decisions—whether you're buying, selling, or refinancing.
Feel free to reply if you'd like to talk through your options.
Talk soon,
Michael Englund
Real Estate & Mortgage Agent
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