If there is one word that dominates conversations about mortgages and housing in the latter half of 2026, it is 'uncertainty.' The ongoing and escalating trade war between Canada and the US and the war in the Middle East, sending oil prices soaring, are pushing prices on consumer goods to sky-high levels. It raises the spectre of growing inflation to the level of forcing the Bank of Canada to raise its rate in October. Uncertainty has taken hold of global bond markets, sending yields higher, with the US 10-year Treasury yield climbing this week to a level not seen since 2007. In Canada, the five-year yield is surging, sending fixed mortgage rates soaring and casting doubt on the housing market outlook for the rest of the year, reports Canadian Mortgage Professional (CMP) "Lenders have scrambled to adjust fixed rates amid that rise, which has seen the five-year yield spike by about 90 basis points from where it lay at the same time last year," says CMP. Tango Financial mortgage agent and realtor Victor Tran told CMP, “Fixed mortgage rates have been climbing and now the forecasts are the prime rate will probably rise, because it’s not looking too good. It’s likely going to be increasing sooner than we expected." .Tran said the ongoing tension and trade war with the US will result in a slow start to housing markets this fall. "Typically, the spring market is the best time to sell, and then the fall market is the second best, but it’s definitely starting from a slower pace,” he said, adding the recent rise in bond yields and borrowing costs marks just the latest twist for buyers and could move a hoped-for housing recovery even further back. “Just in the past less than two weeks, the five-year government bond yield increased by 40 basis points. That’s a huge increase in a short amount of time,” Tran said. “The buyers that had rates locked in before the rate hike might feel some pressure into finding something just so they can secure the rate." “But it’s tough in certain markets where there’s bidding wars in a lot of desirable areas," he added. "The buyers that are looking for condos, they have a little bit more breathing room. There’s not as much pressure, there’s still some supply out there. But the rising bond yields and rising fixed mortgage rates definitely throw a wrench in things.” .In the US, soaring Treasury yields and inflation concerns led the US Federal Reserve to raise its benchmark interest rate on Wednesday for the first time since 2023 and signalled another rate hike could occur later this year. "The Bank of Canada has stayed on hold this year and is still expected to keep rate hikes on ice in its next decision, scheduled for Oct. 28," says CMP. "Still, economists see a growing chance of an increase in December if oil prices continue to rise, possibly spelling bad news for variable-rate mortgage holders and shoppers who could see their rates jump." “So we have people sitting in variable rates considering locking into fixed rates, for example,” said Tran, adding the uncertainty doesn't mean markets will freeze up. He suggests many homebuyers, who have been dealing with dramatic headlines for years, will decide to push ahead with their move despite the wider turbulence. “It’s really hard to plan for these things. I think a lot of buyers are kind of just tired, especially buyers that have been waiting to purchase a home and that have been in the market for a little while,” he said. “I think regardless of what happens in the market, they will still move forward with the purchase. Because time goes on. Life moves on. You can only wait for so long for certain opportunities.”
