Why It’s a Good Time for First-Time Home Buyers

The Ontario real estate market has been on a rollercoaster over the past few years, and since I’m a young mortgage broker in the industry, a lot of my business relies on first-time home buyers. It’s something I take a lot of pride in, especially because I can relate to them. That said, the last few years haven’t been easy. I’ve seen so many first-time buyers sitting on the sidelines, waiting for the waters to cool. But fear not, 2025 presents a unique window of opportunity, especially for first-time buyers.

This year alone, I’ve already helped many first-time buyers purchase their first homes, and I currently have many more pre-approved and looking for homes. While no one can perfectly time the market, the current conditions offer a mix of affordability, incentives, and negotiation power that we haven’t seen in a while.

Here are a few reasons why now is a great time to consider taking your first step into homeownership:

1. Prices Have Stabilized (or Dropped Slightly)

This is a bit of a blanket statement, and since most of my clients are in the Hamilton and Niagara regions, I’ll focus on those areas specifically. But even if you’re outside of these regions, the information is still helpful.

Prices hit their peak in February 2022 in Hamilton and March 2022 in Niagara. From those peaks to today, prices are down around 27 percent in Hamilton and 25 percent in Niagara. Now, that’s not exactly breaking news, as prices bottomed out in December 2022 in what could only be described as a housing correction. What is note worthy, though, is that two and a half years later, prices have remained consistent.

Many sellers who were sitting on the sidelines waiting for a rebound are starting to realize this might be the new norm, or at the very least, they’re unsure when the market will bounce back.

2. Less Competition = More Negotiation Power

Gone are the days of frantic bidding wars and waived conditions. Today’s market is more balanced, giving first-time buyers a rare opportunity to negotiate.

Months of inventory hit 4.6 at the end of June 2025, up from 4 months in June 2024, and well above the long-run average of 2.6 months for this time of year. That basically means homes are taking a lot longer to sell.

Even though prices have stabilized, the negotiation power and peace of mind during the house searching process are much better than in recent years. In a slower market, sellers are more likely to work with serious buyers who are ready to make a move, even if they’re new to the market.

Another key advantage for first-time buyers is that they don’t have a current home to sell. That might seem small, but it makes a big difference. If a first-time buyer is competing with someone who has a home to sell, the seller will almost always work with the first-time buyer when offers are of a similar value. Why? Because in today’s market, selling a home takes longer or not sell at all, and that could affect the closing of the new purchase.

3. Interest Rates Are Low (In Comparison)

Let’s get one thing straight, those sub 1 percent interest rates during COVID were not normal. Not even close. In fact, it could be argued they were too low, but that’s a blog for another day. Just because they’re not under 2 percent doesn’t mean they’re bad.

After a long stretch of hikes, the Bank of Canada has already started cutting rates in 2025. This post comes at a tricky time, because inflation has ticked up and that’s pushed the bond market (and therefore fixed rates) up slightly. However, instead of looking at interest rates month to month (which is extremely volatile) let’s look at them year over year. Since the housing market bottomed out in December 2022, rates are the lowest they’ve been in two and a half years.

Let’s use one of my favourite lenders’ five-year high ratio rates as an example (high ratio means less than 20 percent down, which most first-time buyers fall under). In July 2023, the rate was 5.19 percent. In July 2024, it was 4.59 percent. Today, it’s 4.14 percent.

What I find really interesting is that rates have been falling for two and a half years, but the market has remained steady.

4. Government Incentives Are Stronger Than Ever

I went deeper into this in my last blog if you want to check it out, but first-time buyers in Ontario have access to some solid government programs designed to reduce upfront costs and make homeownership more affordable:

• First Home Savings Account (FHSA): Save up to $8,000 per year tax-free and tax deductible.

• Land Transfer Tax Rebate: Get up to $4,000 off your land transfer taxes in Ontario.

• RRSP Home Buyers’ Plan (HBP): Withdraw up to $60,000 tax-free from your RRSP to use as a down payment.

Final Thoughts

If you’re a first-time home buyer who’s been waiting for the “right time,” this might be it. Prices have held steady for over two years, competition is down, interest rates are lower than they’ve been in a while, and the government is offering more support than ever. I’ve helped a lot of first-time home buyers take the leap this year, and many more are already in the process. You don’t need to have it all figured out, you just need to take the first step.

Let’s chat and see if this is your time to get into the market.