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My clients are split in two right now.

Existing homeowners with renewals coming up are desperately hoping rates drop. They’re less concerned about the broader economy. Their focus is narrow and immediate.

Prospective buyers tell a completely different story. Even with rates expected to fall, they’re hesitant to enter the market. They’re watching job numbers. They’re worried about economic uncertainty.

This split reveals something critical that most housing analysts are missing.

Let’s jump in.

When I dig deeper into conversations with hesitant buyers, the language splits into two camps.

Some say they’re waiting for rates to drop more. They want to time the Bank of Canada’s next move perfectly.

Others are hesitant about entering the market at all. The state of the economy has them spooked. Where job numbers are heading matters more than where rates are going.

Here’s what I’ve learned after eleven years in this business: situational is everything.

The people with job security or those who feel their industry is safe will move forward when opportunity presents itself. Rate environment becomes secondary.

The rate watchers often get caught waiting. Their situation can deteriorate before rates reach their target. Or rates never materialize where they hoped.

Banks and lenders are trying to adapt to industry changes. They’re paying attention to what’s happening in specific sectors.

But they can’t overhaul their criteria overnight.

For self-employed clients, lenders still demand two years of tax returns. There’s history there, but it’s backward-looking data. Sometimes they want current business financials, just like traditional employees need recent pay stubs.

The disconnect becomes obvious during industry disruptions.

Take the film industry strikes. Clients working as self-employed individuals in film had solid two-year earning histories. But they had zero current income because the entire industry shut down.

Lenders were well aware of this situation.

We had to engineer workarounds. Alternative lenders looking at twelve months of earning history instead of twenty-four. Major banks averaging three years of earning power instead of two because the strikes didn’t impact annual earnings when viewed over a longer period.

The lending system is fundamentally built for stable employment patterns that increasingly don’t exist.

Nearly 20% of Canadian income earners are self-employed, at least part-time. Their income isn’t always easy to prove using traditional methods.

Traditional applicants need straightforward income sources and seven to ten days of employment tenure so we can confirm thier on payroll. Self-employed individuals need at least two years of documented self-employment.

This creates a fundamental mismatch during economic transitions. Historical earnings become poor predictors of future payment capacity when employment landscapes shift rapidly.

The current economic data supports what I’m seeing with clients. Canada’s unemployment rate is projected to rise until mid-2025, peaking at 7.1% before improving in 2026 and 2027. However, current trends look to be pushing past that.

Rate cuts from the Bank of Canada are likely back on the table. Unemployment is rising. These two forces create what I call the unemployment paradox.

Lower rates should make mortgages more affordable. In theory, this stimulates housing demand.

But when rates fall because the economy is weakening, the signal becomes mixed. Lower rates can indicate economic instability, which deters potential buyers.

Rising unemployment reduces the pool of qualified buyers. People out of work don’t make major financial commitments. Existing homeowners who lose jobs may be forced to sell, increasing supply and pressuring prices downward.

The psychological impact of employment uncertainty freezes buyer confidence more effectively than rate incentives can stimulate it.

I see this playing out regionally too. Areas with strong job creation maintain housing demand regardless of the broader rate environment. Calgary and Edmonton have seen accelerated job growth recently, and that translates directly to housing demand.

The conventional approach focuses on timing interest rate cycles. Watch the Bank of Canada. Predict the next move. Buy when rates are favorable.

This misses the bigger picture.

Employment trends are leading indicators for housing market health. Job security drives purchase decisions more than rate fluctuations.

For buyers, this means evaluating your industry stability and income predictability before focusing on rate timing. For policy makers, it suggests employment-focused interventions might better support housing market health than rate-centric approaches.

For mortgage professionals like me, it means helping clients understand that their employment situation matters more than perfect rate timing.

The market split I’m seeing isn’t temporary. It’s revealing a fundamental truth about what actually drives housing decisions.

Rate cuts from the Bank of Canada are likely coming. But they won’t save a housing market where people are worried about keeping their jobs.