How Rising Bond Yields Are Shaping Markham’s Housing Market

How Rising Bond Yields Are Shaping Markham’s Housing Market

The Markham real estate market is undergoing a period of significant adjustment, shaped by global financial uncertainty, rising long term interest rates, and shifting consumer sentiment. While challenges persist, the area continues to show resilience rooted in its end user driven foundation and historical ability to lead recoveries.

One of the most pressing concerns for both buyers and sellers is the direction of interest rates. Recent moves in the U.S. bond market have seen long term yields rise, as evidenced by a 2% drop in the TLT ETF. This shift in the yield curve, with long term rates rising while short-term rates remain steady, reflects market anxiety over fiscal deficits and declining demand for long-dated debt. While the Bank of Canada may begin cutting its overnight rate in response to economic softness, fixed mortgage rates in Canada are more closely tied to bond yields, particularly U.S. long bonds. This disconnect means that even if central bank rates decline, fixed mortgage rates may remain elevated or even rise further, placing continued pressure on housing affordability.

In this context, many Markham homeowners who have delayed listing their properties in anticipation of falling rates may need to reassess their timelines. The expected relief in borrowing costs might not materialize soon, and extended holding periods could become the new normal.

April 2025 sales data illustrates the extent of the market's deceleration. Across the Greater Toronto Area (GTA), 5,601 homes were sold, which is down 23.3% compared to the previous year. As of May 26, 2025, Markham, as part of the broader GTA north, experienced a steeper slowdown, with sales in the region falling 26.4% year-over-year. Detached homes in Markham saw average prices drop by 14.4% from a year earlier and are now 22.7% below the February 2022 peak. Attached homes declined 8.2% year-over-year and sit 22.3% below their prior peak.

Market indicators also underscore this shift. The sales-to-new-listings ratio (SNLR) in May 2025 was just 0.26 for detached homes and 0.28 for attached homes, both reflecting the lowest conversion rates in recent memory. Months of Inventory (MOI) rose to 5.8 and 5.3 respectively, the highest levels seen since the onset of the pandemic, signaling a clear buyer’s market.

Yet, despite these pressures, Markham retains several key advantages. Its real estate base is primarily composed of end users, not speculative investors. Additionally, many homebuyers are drawn to Markham for its top ranked schools, convenient amenities, and safe, family friendly neighborhoods. This combination creates a more stable demand foundation and reduces the risk of sudden market corrections. While current listings may take longer to sell, many homeowners who were initially planning to list have chosen to wait, suggesting that much of the inventory pressure may ease naturally over time.

In contrast to the broader GTA, where a few premium neighborhoods such as Leaside and Bedford Park continue to command strong interest and even over asking prices, Markham’s performance has been more measured. However, the city has a proven track record: historically, it has been among the first to recover after downturns. Its location, strong community amenities, and appeal to family-oriented buyers position it well for eventual rebound once interest rates and broader economic confidence stabilize.

Looking ahead, the Markham real estate market will likely remain under pressure as long as long term rates stay elevated and economic uncertainty persists. But the fundamentals, particularly the predominance of owner-occupiers and relatively economically stable and cautious sellers, suggest that the area remains well-positioned for recovery when conditions improve. Sellers who can afford to hold for three to five years are likely to benefit from the next upward cycle.

In today’s environment, staying informed and realistic is essential. While timing the market may be difficult, understanding the drivers behind current trends can help homeowners and buyers alike make more confident decisions.



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