Navigating Inflation, Tariffs, and Economic Uncertainty in Today’s Real Estate Market

Navigating the current real estate market is more complex than ever, with inflation, tariffs, and economic uncertainty creating new challenges for homeowners—especially those facing a mortgage renewal. Rising prices on everything from groceries to construction materials are putting pressure on budgets, while fluctuating interest rates make it harder to plan ahead. Whether considering a new mortgage, preparing for a renewal, or debating between fixed and variable rates, staying informed is essential. This breakdown explores mortgage strategies, how to negotiate effectively with lenders, and offers key insights from the latest Royal LePage consumer survey to help make confident, financially sound decisions in today’s market.

The Economic Landscape: Inflation, Tariffs, and Uncertainty

First off, let’s talk about what’s driving these changes. Inflation has been a hot topic for a while now. Prices for everything—from groceries to building materials—are climbing, and that’s putting pressure on household budgets. When inflation rises, central banks often hike interest rates to cool things down, which directly impacts mortgage rates. For homeowners, this means higher borrowing costs, whether you’re buying a new place or renewing your existing mortgage.

Then there’s the tariff situation. With trade policies shifting—think potential tariffs on imports from countries like Canada, Mexico, and China—the cost of goods could climb even more. Construction materials, for example, might get pricier, slowing down new home builds and tightening supply. That’s a big deal in a market where demand is already strong. And let’s not forget economic uncertainty. Between global trade tensions and unpredictable policy changes, it’s tough to know what’s around the corner. This uncertainty can make buyers hesitant and lenders cautious, creating a ripple effect across real estate.

So, how does this all hit the market? Prices might stabilize or even dip in some areas as affordability takes a hit, but in high-demand regions, the pressure could keep values climbing. For homeowners facing renewal, it’s a tricky time to lock in a rate or renegotiate terms.

Mortgage Options: Fixed vs. Variable Rates

One of the biggest decisions you’ll face is choosing between a fixed or variable rate mortgage—especially in this climate. I break this down in detail in my video, “Navigating the Real Estate Market”, so check it out for a deeper dive. But here’s the gist:

• Fixed Rates: These give you predictability. Your payment stays the same, no matter what happens with interest rates. Right now, with rates hovering around 6.76% for a 30-year     fixed (according to Bankrate’s March 2025 survey), it’s a solid option if you want stability amid inflation and uncertainty. The Royal LePage survey found that over half of Canadians renewing this year expect their payments to jump, so locking in could ease that worry.
• Variable Rates: These fluctuate     with the market, which can save you money if rates drop—but it’s a gamble. If inflation pushes rates higher, your payments could spike. It’s a choice     for those who can handle some risk and think rates might ease later in 2025.

My take? If you’re risk-averse or on a tight budget, go fixed. If you’ve got some financial wiggle room and believe the Fed might cut rates soon, variable could pay off. It’s all about your comfort level and cash flow.

Negotiating with Banks: Tips to Get the Best Deal

Facing a renewal? Don’t just accept the first offer your bank throws at you. Banks want your business, and you’ve got leverage—especially if you’ve been a good customer. Here’s how to negotiate:

1. Shop Around: Get quotes from multiple lenders. Competition is your friend. Mention a better rate you found elsewhere—it can push your bank to match or beat it.
2. Know Your Credit: A strong credit score gives you bargaining power. Check it before you start talks.
3. Ask for Perks: Even if the rate’s firm, you might snag lower fees, a cashback offer, or a flexible payment schedule.
4. Leverage Your History: Been with your bank for years? Highlight your loyalty. It can tip the scales.

I’ve seen clients shave hundreds off their monthly payments just by asking the right questions. In uncertain times, every dollar counts—so don’t be shy!

Insights from the Royal LePage Consumer Survey

The Royal LePage survey offers some eye-opening stats that really bring this home. More than 50% of Canadians renewing their mortgage in 2025 expect a payment hike—yikes! That’s a huge chunk of homeowners feeling the pinch from rising rates and inflation. The survey also notes a dip in consumer confidence, with economic uncertainty making people think twice about big moves like buying or upgrading.

But it’s not all doom and gloom. In markets like Calgary and Winnipeg, Royal LePage forecasts home price growth of 8% by year-end 2022 (a bit dated, but the trend holds), driven by strong local economies and affordability. That suggests opportunities still exist, especially if you’re in a region where demand outpaces supply. The key is understanding your local market and timing your renewal or purchase wisely.

Practical Advice for Homeowners Facing Renewal

So, what can you do right now? Here’s my playbook:

• Start Early: Don’t wait until your renewal date. Begin exploring options 4-6 months out. Rates can shift fast, and you’ll want time to negotiate.
• Crunch the Numbers: Use a mortgage calculator to compare fixed vs. variable scenarios. Factor in potential rate hikes—say, 1-2%—to see what you can handle.
• Build a Buffer: Inflation’s eating into budgets, so cut discretionary spending where you can. A little cushion now could save you stress later.
• Consider Shorter Terms: A 15-year fixed might mean higher payments but less interest over time. If you can swing it, it’s worth a look.
• Get Educated: Knowledge is power. My First Time Home Buyers Course is packed with tips on navigating this stuff—whether you’re a newbie or a seasoned owner. !

Opportunities Amid the Challenges

Despite the headwinds, there’s a silver lining. Builders are offering rate buydowns to lure buyers, which could lower your costs upfront. And if you’ve got equity, a HELOC might help consolidate debt at a lower rate than credit cards. For first-timers, sentiment’s improving—per the survey—suggesting people see a light at the end of the tunnel, even if rates stay elevated.

Wrapping Up

Inflation, tariffs, and economic uncertainty are definitely rattling the real estate cage, but you’ve got options. Whether it’s locking in a fixed rate, negotiating like a pro, or just getting a handle on your local market, preparation is key. The Royal LePage survey shows us the challenges—like those payment hikes—but also hints at resilience in certain markets.

Want to dig deeper? Watch my video “Navigating the Real Estate Market” for more insights. And if you’re ready to take control of your homeownership journey, sign up for the First Time Home Buyers Course . Need personalized advice? Let’s chat— and we’ll figure out your next steps together.