In May 2025, Canada hit an economic point that many didn’t see coming. While interest rates remained unchanged and cherry blossoms lined the streets, a silent storm was brewing - the country’s unemployment rate climbed to 7.0%, it’s highest since the pandemic years. Though national job growth was technically flat with only 8,800 jobs added, the underlying numbers tell a deeper, more troubling story - one that could spell cooling winds for the already fragile housing market.

The latest labour data reveals a market that’s quietly losing momentum. Full-time jobs did see a modest rise of 58,000, but this was nearly wiped out by a steep decline in part-time roles, which dropped by 49,000. Youth unemployment among students surged to 20.1%, and the average length of unemployment stretched to 21.8 weeks. For core-aged men, job losses totalled 31,000 - all indicators of growing instability.

This matters because housing markets don’t exist in a vacuum. They’re deeply intertwined with consumer confidence, borrowing power, and future outlook. When people don’t feel secure in their jobs, they delay big decisions - like buying a home.

First-Time Buyers Take a Hit

Young Canadians, already grappling with unaffordable home prices, now face a bleaker job market. With youth unemployment soaring, many are pushing back key milestones: moving out, renting, and saving for a down payment. This delays demand from one of the most crucial buyer segments.

Mortgage Defaults May Rise

With 1.6 million Canadians unemployed, some homeowners - especially those who bought at market peaks - may find it difficult to meet mortgage obligations. As unemployment stretches, defaults could inch up, particularly in economically strained regions.

A Breather for Renters?

Interestingly, a softer labour market may ease the rental crunch in urban centres. With fewer people relocating for work and more young adults staying home longer, the rapid rise in rental demand may temporarily stabilise.

Wages Offer a Silver Lining - For Now

Despite rising joblessness, wages grew by 3.4% year-over-year, reaching an average of $36.14 per hour. For those still employed, this increase helps soften inflation’s impact and may keep homeownership within reach - for now. However, if job losses continue, wage growth may not even hold.

Looking Ahead

The May job data is a flashing yellow light - a warning, not a full stop. The housing market isn’t crashing, but it is cooling. If the trend of rising unemployment continues into the summer and fall, particularly in service-heavy regions, we may see a wave of distressed listings, slower sales, and price softening through late 2025. For buyers, this could mean more negotiating power. For sellers, a reality check. And for everyone else - a reminder that Canada’s housing story is far from settled.

If you have any questions about today’s blog topic, or questions about anything real estate- related, please give me a call, 905-693-7800.

If you are thinking about buying, selling or both this year, please reach out.  There is over 100 years of experience on the Brian Kondo Real Estate Team. 



 
Using our proven Home Selling system, we help our clients sell their homes fast, for top dollar, in the least amount of time, using our expertise to make it a smooth and pleasant experience.   


 

Using our exclusive Home Buying System, we help our clients navigate the home buying process to find the home of their dreams! 



 
To find out more, please call me at  905-683-7800.  You can also email me at brian@briankondo.com.





 

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Brian Kondo
Sales Representative / Team Leader
The Brian Kondo Real Estate Team
Re/Max Hallmark First Group Realty Ltd.
905-683-7800 office
905-426-7484 direct
brian@briankondo.com
www.BrianKondo.com
www.BrianKondoTeam.com

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