The Greater Toronto Area housing market saw an improvement in affordability in May relative to the same period a year earlier. With sales down and listings up, home buyers took advantage of increased inventory and negotiating power. Home ownership costs are more affordable this year compared to last. Average selling prices are lower, and so too are borrowing costs. All else being equal, sales should be up relative to 2024. The issue is a lack of economic confidence. Once households are convinced that trade stability with the United States will be established and/or real options to mitigate our reliance on the United States exist, home sales will pick up. Additionally, with inflation remaining low, an interest rate cut would be welcome news – particularly for first-time buyers and those renewing their mortgages. On Wednesday morning, the Bank of Canada held its key interest rate at 2.75 per cent, choosing not to add more support to the economy despite recent concerns of an economic slowdown. Economists expect the central bank will have to lower its policy rate at some point this year, noting there are already signs of weakness in the economy due to the U.S. trade war. Those signs are apparent in the labour market, where the unemployment rate rose to 6.9 per cent in April. The final weeks of the 2025 spring real estate market may bring a burst of activity as buyers with children prefer to move before the start of the new school year, while sellers are aware that the traditional summer slowdown is looming.