Kulwinder Dheria

Amid rising concern about housing affordability for younger Canadians, this article investigates the housing market outcomes of millennials compared with Gen-Xers and baby boomers at a similar age (25 to 39 years). Using Census of Population data from 1991, 2006 and 2021, this article examines shifts in the housing market outcomes of each generational cohort in relation to moving out of the parental home, forming families and homeownership status.

Key findings

• In 2021, the share of millennials aged 25 to 39 living in a census family with parents (16.3%) was around twice the share of baby boomers of the same age in 1991 (8.2%). This trend has occurred gradually over time and is common to the large cities studied.
• After accounting for those living with their parents, millennials had the lowest rate of homeownership (49.9%), compared with Gen-Xers (56.2%) and baby boomers (55.9%) when they were aged 25 to 39 years.
• Fewer millennials aged 25 to 39 were married with children (26.6%) compared with Gen-Xers (34.5%) and baby boomers (46.6%) when they were the same age―the household type with the highest rate of homeownership historically.
• Millennial homeowners, after accounting for those living with their parents, were less likely to live in single-detached houses relative to earlier generations, especially those living in Toronto and Vancouver.

The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%.

The conflict in the Middle East is now in its fourth month. The resulting increases in energy prices and disruptions in global supply chains are weighing on global economic growth and pushing up inflation. At the same time, the US administration continues to propose new tariffs and trade policy uncertainty remains elevated.

In the United States, economic growth remains solid, supported by consumption and AI‑related investment. In the euro area, growth is subdued, with higher energy prices weighing on activity. China’s economic growth continues to be supported by strong exports.

Canadian financial conditions have loosened since the April Monetary Policy Report. Global equity markets have been buoyant and bond yields remain volatile. The Canadian dollar has weakened against the US dollar and other currencies.

In Canada, GDP edged down by 0.1% in the first quarter, weaker than expected at the time of the April MPR. Consumer spending grew 1.4% but government spending unexpectedly declined. Housing activity also declined and business investment remained weak. Exports fell while imports rose strongly as inventories were rebuilt. Employment was up in May, but looking through monthly volatility, employment in Canada is little changed since the start of the year. The unemployment rate continues to fluctuate in the 6 ½%-7% range with the most recent reading at 6.6% in May.

Key developments in Canada’s residential mortgage market in 2025 and the outlook for 2026:

• In 2025, the mortgage market activity was dominated by renewals of existing mortgages, rather than new mortgages taken out by homebuyers.
• Renewal volumes are expected to ease in 2026. Borrowers renewing after a 5-year term are likely to face a similar interest-rate shock as those who renewed in 2025.
• Insured mortgage activity increased compared to uninsured lending. New eligibility rules made it easier for first-time homebuyers and new home buyers to qualify for mortgage insurance.
• The national 90+ days mortgage delinquency rates increased in 2025. The increase was largely concentrated in Ontario, especially Toronto, where households faced growing payment pressures.
• Despite the increase, 90+ days delinquency rates remain low by recent standards. Delinquencies on non-mortgage products – often a predictor of mortgage defaults – are rising but at a slower pace.
• Canada’s residential mortgage debt exceeded $2.4 trillion in December 2025, reaching a new high.
• Overall, borrower stress is increasing due to softer labour-market conditions and accumulated exposure to higher interest rates. The system is more rate-sensitive, but remains structurally stable.

Key trends to watch

The following factors may influence the performance of Canada’s residential mortgage market in the coming years:

• Upcoming renewal cycles, particularly borrowers rolling into new rates through 2026–27.
• Labour market conditions, given their close relationship with arrears.
• Shifts in insured mortgage activity, including amortization trends and eligibility effects.
• Performance of nonbank lenders, especially where borrower profiles differ from banks.