The word “recession” can sound intimidating—especially when you’re thinking about buying a home or refinancing your mortgage. But economic downturns don’t automatically mean you should hit pause on your real estate goals. In fact, a slower market can offer surprising advantages for buyers and homeowners who are prepared.
Let’s explore what happens in the mortgage and real estate world during a recession—and how you can make smart, confident moves even in uncertain times.
💡 What Is a Recession, Really?
A recession is typically defined as a decline in economic activity lasting two or more quarters, often accompanied by higher unemployment and reduced consumer spending.
But it’s important to remember: not every industry is affected the same way, and real estate tends to behave differently than other sectors.
🏡 What Happens to Real Estate During a Recession?
Here’s the good news—while recessions can impact the broader economy, the Canadian housing market doesn’t always follow the same path. In many cases:
- Housing prices stabilize or soften, giving buyers more negotiating power
- Interest rates may drop as the Bank of Canada adjusts policy to stimulate the economy
- Competition decreases, meaning less bidding wars and more time to make decisions
- Sellers become more flexible, opening the door to better deals and conditions
It’s a shift from the frantic pace we often see in hot markets—and that can work in your favour.
📉 How Mortgages Are Affected
Lenders don’t stop lending during a recession—but they may get a bit more selective. You can expect:
- Favourable fixed rates if interest rates are lowered to boost the economy
- Tighter credit requirements (good credit and steady income help here)
- Great opportunities to refinance if your current rate is higher than what’s available now
If you’re considering refinancing to improve cash flow or access equity, we’re happy to walk you through it. Start your application here.
✅ Why a Recession Might Be the Right Time to Buy or Refinance
Every market has its pros and cons, but here are a few potential benefits of making a move during a recession:
- More choice, less pressure – Homes may sit longer on the market, giving you time to explore.
- Stronger position as a buyer – You can negotiate price, closing date, and even extras like repairs.
- Better rates – Recessions often bring lower mortgage rates to stimulate economic growth.
- Chance to build equity early – Buying in a softer market may mean greater appreciation when the economy rebounds.
🛠️ Tips for Navigating Real Estate During a Downturn
- Know your budget – Use our Mortgage Affordability Calculator to understand your limits.
- Get pre-approved – Having your financing lined up makes you more confident and competitive.
- Work with a mortgage broker – We’ll compare lenders and walk you through current rate trends and approval options.
- Look long-term – Real estate is rarely a short game. Focus on stability and growth over time.
- Stay calm – Recessions are temporary. The market always evolves.
🤝 The Local Broker Is Here to Help You Stay Grounded
Whether you’re buying your first home, upgrading, or looking to refinance, we’re here to help you make sound financial decisions—with clarity, care, and personalized advice.
Questions about your mortgage during a recession? Just want to talk through your options?
Reach out to us anytime—we’re ready when you are.
Uncertainty in the economy doesn’t mean you have to put your plans on hold.
With the right guidance, this could be the moment that opens doors.
