Local real estate shifts into a buyer’s market as average prices decline

Sarnia-Lambton has transitioned into a buyer’s market with home prices seeing a sharp 21% annual decline in February. Rising global oil prices are expected to push mortgage rates higher, making timing critical for local homeowners and buyers.

For the month of February the sales-to-new-listings ratio landed at just 35.5% which firmly indicates that this is a buyer's market. Inventory sits at 6.6 months, which is the highest we've seen in over a decade. Homes that did sell were on average 4% under asking price which is also the highest discount we've seen in quite some time.

The average price year to date was $447,562 which is down by 14% from February of 2025. February itself saw a sharp decline as the average Sarnia home price was $421,186 which is certainly something to monitor as that's a 21% decrease from February of 2025. However, there were only 72 transactions so we should wait for more data before deciding that Sarnia may have a 'new normal'. The spring market will be more indicative of what is actually happening in the market overall.

Of course, we have a new war that is affecting housing and it will be interesting to see how that plays out and what that means for Sarnia homeowners. Escalating tensions in the Middle East have pushed oil prices higher, and those increases are quickly influencing financial markets – including mortgage rates. Just a few weeks ago, many Canadian fixed mortgage rates were below four per cent and trending downward.

That trend is now expected to reverse. Here are three key things homeowners and buyers should know.

1. Rising Oil Prices Are Driving Mortgage Rates Higher When oil prices climb sharply, inflation expectations tend to rise as well. This pushes government bond yields higher, and since Canadian fixed mortgage rates are closely tied to bond yields, lenders usually raise rates in response. Because of this shift, most fixed mortgage rates in Canada are expected to move into the 4.04% to 4.5% range very soon. Just two weeks ago, nearly every fixed rate available was still under four per cent.

2. Bank of Canada Rate Cuts Are Now Unlikely Earlier this year, some analysts expected the Bank of Canada to deliver two additional interest rate cuts before the end of the year. However, rising oil prices increase inflation risks, making central banks more cautious about lowering rates. Unless geopolitical tensions ease quickly, it would seem that additional rate cuts in 2026 are unlikely. That means Canadians hoping for significantly lower mortgage rates in the near future will need to adjust expectations.

3. Timing Matters for Renewals and Rate Holds For borrowers currently in the mortgage process, timing is becoming increasingly important. Anyone who has signed a formal mortgage commitment has already secured that rate and will not be affected by market increases before closing. Buyers with firm pre-approvals that include a rate hold are also protected but only until the expiry date listed on the approval. Check your dates people!

Homeowners who have received renewal offers from their lender should also pay attention to expiry dates. If an offer expires during a period of rising rates, the next quote may be higher.

The Bottom Line With oil prices rising and geopolitical tensions adding uncertainty to global markets, Canadian mortgage rates are likely heading higher in the short term. For homeowners in Sarnia and across Canada, paying attention to rate commitments, renewal offers, and deadlines could make a meaningful difference in borrowing costs.

For follow-up comments or questions, please contact Chris Lewis.

The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the views or positions of any agency, brokerage, or organization with which the author is affiliated. This content is provided for informational purposes only and should not be considered financial or legal advice.