Mortgage 101 – Is a Busy Summer Real Estate Wave Coming?

Dan Ahlstrand and Clinton Wilkins discuss the impact of weather and market uncertainty on the real estate market, noting a softer-than-anticipated spring season.

Summer Market Trends and Weather Impact

Dan Ahlstrand
It’s June. We’re back. Welcome to Mortgage 101. I’m Dan Ahlstrand. And, as always, it wouldn’t be a show without our partner in crime, and that, of course, is Clinton Wilkins. Clinton, how are you?

Clinton Wilkins
I’m doing great. Happy June. It feels like maybe summer is actually around the corner, at least, we’re recording here. This is Thursday. We’re recording great weather today, and I think it’s gonna be great weather tomorrow. I don’t know about the weekend when our listeners are gonna be listening to this show, but it’s starting to feel like maybe summer is actually upon us.

Dan Ahlstrand
We know that when the warm weather comes, when the grass is growing, when the flowers are planted, when people get into that summer mode, maybe vacations, kids are getting ready to come out of school, kind of gets things rolling, so to speak, when it comes to big decisions and good discussions, maybe around a patio table outside with the family, and as you’re looking at your house, thinking, man, it’s getting pretty tight quarters in here. Maybe it’s time for us to upgrade, or maybe it’s time for us to get out of this apartment, because it’s 5000 degrees in here. Wouldn’t it be nice to have a backyard to hang out in? And that kind of drives what we’re going to talk about this month, and that is, it’s summertime, and the market is, or summertime, and the market is starting to warm up now. Clinton, we saw softening this week from the realtors, suggesting that spring didn’t spring as much as it normally does. Maybe the spring just never sprung, but it was, it was softer than anticipated. Why is that?

Clinton Wilkins
I think kind of hit on it. It potentially was weather-related. We, and we’ve said this before on the show, the spring is typically the busiest real estate market of the year. And I said, even last couple months, it’s softer, and I think it’s going to be softer. And then, lo and behold, we’re hearing reports that it has actually been soft. So I think we called it here first, or predicted it. I don’t know, now that we’re driving or doing anything with the market, obviously I want it to be busy. I think partially because of the weather, and I think there’s been a delayed reaction, but I’m cautiously optimistic that it’s going to be an abnormally busier summer. So, as much as the delay was in the spring, I think that maybe it’s going to be some pent-up demand. I think partially, A, the weather was a contributor, I think. B, kind of market uncertainty. We’re talking about the tariffs; we’re talking about GDP; we’re talking about, are we in a technical recession? Some of these things impact borrowers, and it makes them stay on the sideline. They need more of a plateau situation to then kind of make some plans, but the rates have been relatively stable and much lower than the last couple of years, so we’re not in an inflationary rate environment. I think we’re more in a balanced rate environment, so it’s not hot in terms of demand or not cold, but we’ve, we’ve seen very steady demand here in Halifax, so for things to be soft, I think maybe it’s just early indications that there is more uncertainty in the market than we think that there is.

Market Uncertainty and Economic Factors

Dan Ahlstrand
I’m glad you mentioned the recession, because I know that GDP is something that you watch very closely. The Bank of Canada, obviously, and we’re going to see an adjustment here shortly, but the Bank of Canada is obviously the big one. But you watch GDP pretty closely, and the last three months of 2025 we saw a 1% decline in GDP; then the first three months of this year we saw a point 1% decline in GDP. By definition, that’s two quarters of retraction, and that brings in that term that you told us earlier about this recession, this technical recession. Tell me a little bit about how the mortgage market reacts to something like that.

Clinton Wilkins
The way the market really reacts. I think maybe it’s like a knee-jerk reaction initially. So they hear negativity, they retract, they stay on the sidelines, and I think that used to happen for a longer period of time, but because we’re getting this stuff thrown at us all the time,, it’s, it’s COVID, then it is tariffs, then it is Iran, we are getting desensitized, I think a little bit from the negative media, and I think that, obviously, well, each person is gonna be, impacted differently, and they’re gonna have different, feelings and emotions, but I think what’s impacting Canadians right now, it’s what’s going on in their wallet, it’s the dollars and the cents is what’s impacting people, and that’s being really driven by this inflation. Inflation actually right now is quite low. Yes, it has edged up a little tiny bit, primarily driven by the cost of oil, but I think kind of the news and the negative news that people hear- I feel like maybe it was a longer hangover before- but I think because we’re getting desensitized, we’re hearing some negativity, we’re processing it, and we’re moving on. We’re almost like, okay, when’s the next- when the next shoe gonna drop? So I know that might be a roundabout way to answer it, but I think that the uncertainty kind of ebbs and flows. Those, but before, I think it was maybe a longer cycle of kind of that negativity before things plateaued again, and I think right now we’re just getting thrown, negativity is getting thrown off at us all the time, and we’re just becoming a little bit more, I think, numb to it.

Dan Ahlstrand
Is that the next shoe to drop, the next decision from the Bank of Canada? Obviously, lots going on with GDP, as we just talked about, and the economy, gasoline prices, and people being a little nervous about making a big financial decision. Does that weigh into the Bank of Canada decision? And do you think that it’s time that the bank drops that rate again?

Clinton Wilkins
So here’s what I will say to you. The economists would really predict that, and they’ve said this, that the rates would go down right now if it wasn’t for what’s going on in Iran and the oil situation. So, let’s say that this solves itself, next month we could see lower rates into the end of the year. There’s another group of economists say, if Bank Canada was going to increase rates, I’m not saying they’re going to, but if they were, the earliest would be the, the end of the year, but let me tell you, I think it’s now, we’re like at least a year out from any potential increase, I’m not saying rates are increasing, don’t quote me, what I’m saying is, if they were in a situation where they needed to, we are probably like 12 months out from not even being, on the radar, quite likely just due to the current economic environment, and a technical recession. Maybe our listeners might want to know. I’m sure they’ve heard it in the news, but some people are only getting their news from us. A technical recession is two quarters of negative GDP growth, and that’s what’s happening right now. Now, the amount of negative we were is really like point one, so it’s potentially a rounding error, but it certainly hasn’t been positive GDP growth. I’m looking at job numbers, I’m looking at GDP, obviously I’m looking at inflation. Those are the kind of three key drivers that I’m looking at here in Canada. We’re also watching what’s going on in the US and they’ve been very coupled to us on a date cycle, but the dates are one week off now, so it’ll be very interesting to see what the Bank Canada does, and the Bank Canada announcement is next week, and then I think the Fed announcement is the following week, so we’ll obviously be watching, we’ll be reporting as well.

Dan Ahlstrand
So good chance that it’s going to be a hold, maybe a drop in the next go around with the Bank of Canada.

Clinton Wilkins
It could be; I think it is quite likely going to be a hold here next week, I think. But here’s the thing, Dan, a lot happens in one week. As much as we think, everything’s very consistent, and we’re in a plateau, things with there could be a deal with Iran, they get more data that comes out, job numbers, etc. etc. And the job numbers aren’t coming out between now and then, but let’s say that we did get some new information, they’re making that decision on the day, these decisions aren’t made weeks in advance. It literally comes down to a lock-up, and these guys are getting together and making the decision that day before the announcement. Obviously, everyone has their preconceptions; the markets are making decisions, economists are giving forecasts, and they’re putting out decisions, like into next week. We typically have a pretty good idea before the Bank of Canada is making an announcement what’s going to happen, and we’re reading all that stuff, we’re gathering information, but I think it’s going to be a hold right now. I do think so, and then we’ll see what happens with oil, and we’ll keep an eye on those key drivers, like the job numbers, GDP, and inflation.

Consumer Spending and Financial Decisions

Dan Ahlstrand
Oil prices continue to fluctuate just about daily. We saw a drop in gasoline prices last week; we saw a drop in gasoline prices again this week. Clinton people are watching their spending really closely, because we know that everything that we buy comes in on a truck. Diesel prices are high, grocery store inflation is high. That’s discretionary spending. Does that weigh into the decision to maybe move on a purchase of a home or to refinance your mortgage, because you got to save that money for that down payment?

Upcoming Market Trends and Predictions

Clinton Wilkins
Need to save the money for the down payment. You need to be able to make your payment. You need to have a fallback position that if something goes wrong in the house, you need to be able to fix it. I think there’s a myriad of things that are making up someone’s decision to do a big financial transaction. I think maybe inflation isn’t necessarily a reason why people would not refinance. Typically, people are refinancing to better their financial position. Typically, not saying it’s always paying off debt, but they’re refinancing to maybe pay off debt or renovate, or maybe do investments. So, usually, they’re improving their situation when they’re doing a refi. I think it’s more so impacting these buyers that are potentially going to be entering the marketplace, whether it’s to buy a first home or maybe buy a bigger home, I think those are the ones that are going to be most impacted today, and the reports coming out for the realtors here in Nova Scotia seem to indicate that in the spring, and we’ll talk about that more on the next segment as well.

Dan Ahlstrand
That’s right, we’re going to take our first break here on Mortgage 101 for our June edition. When we come back, we’re going to take a look at what the market looks like. Like what you can expect if you’re planning to refinance your home, or if you’re planning to make that step, or to take that step, and to maybe buy a house in this summer season. You’re listening to Mortgage 101. We’re back in minutes.