Why Long-Term Homeowners Aren’t Worried About the Market Bottom

Four years after Canada’s housing market boom came to a sudden end, economists and market watchers are starting to speculate that we may be approaching, or have already hit, the bottom.

But for most homeowners, all that speculation about the state of the market may not matter much. While home prices may be at or near their lowest points in this cycle, long-term homeowners have been steadily building wealth in their homes over the last decade, even factoring in the current dip. 

Unlocking home equity has traditionally come with significant trade-offs: either trying to time a home sale at the market peak, or taking on debt subject to fluctuating interest rates. But a Home Equity Sharing Agreement is a modern alternative that allows homeowners to separate out equity from occupancy, and access the wealth they’ve accumulated without selling or taking on debt.

Has the Canadian Housing Market Reached the Bottom?

There are some signs that the bottom may be in the rearview mirror. But the rebound might be slow and steady instead of a boom. Here’s what experts are saying:

The Case for the Bottom: Price Floor and Stabilization

Consecutive Monthly Gains: July marked the fourth consecutive monthly increase in home re-sales. The MLS Home Price Index also increased for the second month in a row, marking the first back-to-back monthly home price increase since early 2024, prompting RBC economist Robert Hogue to suggest home values “have already hit their cyclical bottom.”¹

Levelling off in Hardest Hit Markets: Home volumes and prices have likely “bottomed out” in markets including Vancouver, Toronto and the rest of southern Ontario, BMO economist Robert Kavcic wrote.²

Not So Fast: Why the Rebound May Be Slow and Uneven

Driven by Low Supply: The market is reaching a balanced state, but that’s largely due to tighter supply. Without more in the pipeline, the recovery is likely going to be slow and flat, Kavcic wrote.³

Urban Condo Drag: Unlike the broader housing market, condominium inventory, particularly in Toronto, is “extraordinarily high” compared to historical norms, Move Smartly Realty Inc. president John Pasalis wrote.⁴ Condos will face a much longer climb back to balanced market territory and higher prices.

Macroeconomic Factors: Weak population growth and modest hiring growth are likely to continue restraining home sales, wrote TD economists Rishi Sondhi and Matt Palucci. They forecast in July that Canada won’t see a return to pre-pandemic levels until mid-2027.⁵ The recently reignited trade war between the United States and Canada also threatens to shake buyer confidence and undo the market’s fragile progress.

What the Bottom Means (or Doesn’t) for Homeowners

Unlike stocks or bonds, residential real estate is an all-or-nothing asset. As Johnny Henderson, Clay Financial’s co-founder and CEO, recently pointed out, an investor facing an unexpected bill can easily liquidate a small fraction of their stock portfolio, but a homeowner can’t sell part of their home when they need cash. For homeowners who need liquidity, accessing their home equity without taking on debt has often meant trying to time the market — and potentially selling at a low point if they can’t wait. 

That can be a difficult trade-off for homeowners to make, given how far prices have fallen from their market peak. The average Canadian home price was $674,819 in July 2026, down from a record $816,720 in February 2022 (in Toronto, the average sale price was just over $1 million in July, down from $1.33 million at the peak). 

But the current market commentary around whether to sell or hold on, and whether we’ve hit the bottom or not, obscures the bigger picture. Even factoring in the recent market slump, long-term homeowners have benefitted from significant price appreciation in the past decade alone, in part thanks to the massive run-up post-pandemic. In July 2016, the average Canadian home price was $480,743 (and $709,825 in Toronto), meaning that in the past decade, the average home price increased by 40%. Our own analysis has found that the value of the average Canadian owner-occupied household’s home equity grew 53% over the past decade.⁶

Long-term homeowners have been building up real wealth over time. That equity is still tappable today, market bottom or not.

Options to Access Your Home Equity (and Their Limits)

Whether it’s the bottom of the market or the top, selling may just not be the ideal option when you need access to capital to fund your retirement or cover an emergency. Your home might be where you’ve spent decades, raised a family and plan to live out your golden years. Or maybe there aren’t any options on the market that make sense to downsize into. It also involves substantial costs, from realtor commissions to potential mortgage prepayment penalties.

While a home equity line of credit (HELOC) can be a useful way to access your home’s equity without selling, it comes with a monthly debt payment that can drag down a fixed budget. With HELOCs offered at a variable interest rate, monthly payments can balloon if rates rise. At the end of 2019, Canadians paid an average $573 per month toward their HELOC; by the end of last year, that reached an average of $862 per month, according to Canada Mortgage and Housing Corporation data.⁷ In 2022 alone, HELOC payments increased from $505 per month in the first quarter to $714 by the end of the year after a series of rate hikes from the Bank of Canada.

How A HESA Helps You Access Your Equity Without Selling

A Home Equity Sharing Agreement (HESA) with Clay Financial gives you access to the wealth you’ve spent years building—without taking on debt or selling your home. Qualifying homeowners can unlock up to 17.5% of their home’s appraised value as a tax-free, lump-sum payment⁸ to use for anything, whether that’s paying off major expenses or supplementing retirement savings.

In exchange, Clay invests alongside you:

• No Monthly Payments: Because our HESA is an investment rather than a loan, there are no monthly payments and no interest accruing in the background. 
• Protects Built-Up Equity: Clay shares in a portion of your home’s future appreciation (or depreciation⁹), leaving the equity you’ve already accumulated completely untouched. 
• Flexible 25-Year Timeline: Maintain the agreement for up to 25 years, or settle early without penalty by selling, buying Clay out (available anytime after year five), or upon passing away. 

At the end of the term, you simply settle the agreement with a payment equal to the original lump sum received plus (or minus, if the home depreciates) Clay’s share of the change in property value.

Tune Out Market Noise and Turn Your Home Into a Flexible Asset

We can’t say for sure whether we saw the bottom of the market last month, last week, or if it’s still to come (unfortunately, we don’t have a crystal ball). But when you’re able to separate your home’s equity from the physical building, market swings have less of an impact on your life and plans. A HESA allows you to treat your home more like a traditional portfolio asset that’s flexible to your needs, and stay in your home for the long haul.

Ready to see how much wealth you’ve been accumulating? Get a free, no-obligation estimate on our website to see how much equity you could access with a HESA.

1. See RBC’s August monthly housing market update report. ↩︎
2. See BMO’s Canadian housing monitor report for July. ↩︎
3. See footnote #2 above. ↩︎
4. See John Pasalis’ June market commentary on LinkedIn. ↩︎
5. See TD Economics’ provincial resale market outlook for July. ↩︎
6. Analysis by Clay Financial based on household wealth data from Statistics Canada (Q4 2015 to Q4 2025). ↩︎
7. See CMHC data on average monthly scheduled payment by credit product. ↩︎
8. HESA payment net of our origination fee and the costs of an independent appraisal and home inspection. ↩︎
9. We share in the depreciation of your home if you sell your home anytime after the initial five years of our agreement. Learn more on our website. ↩︎