A series of policy changes has cooled Canadian home price growth, while eating into the budgets of would-be homebuyers.

The Bank of Canada hiked the overnight rate to 1.75 percent last month, and mortgage rates have been rising alongside it. What’s more, stricter mortgage rules mean fewer Canadians are able to qualify for the mortgage they want.

How is this affecting housing activity this month? Livabl has rounded up the latest industry commentary to keep you in the know.

Higher interest rates are taking a bite out of sales

Canadian home sales fell 1.6 percent month-over-month in October, the second month of falling activity for the housing market.

Previously well performing markets saw sales declines, including a 2.9 percent drop in Montreal and a 16.8 percent decline in Hamilton, according to the latest data release from the Canadian Real Estate Association (CREA).

TD economist Rishi Sondhi notes that, while the market had seemed to adjust to stricter mortgage qualification rules over the summer, higher interest rates appear to be creating a dampening effect.

“Policymakers are probably pleased with what has so far been an orderly slowdown in housing, with markets across the country generally balanced and prices growing at a more manageable pace,” he writes.

Buyers remain concerned about the cost of homeownership

In a new survey from rate comparison website Ratehub.ca, up to 44 percent of respondents cited insufficient down payment funds as the primary hurdle to buying a home. Other concerns included housing market uncertainty at 17 percent, household income at 12 percent and credit score at 6 percent.

Rising mortgage rates are also on buyers minds. Up to 68 percent of respondents believe mortgage rates will increase in 2019, while 58 percent think home prices will follow suit.

But the respondents might be overly pessimistic about the state of the market. Many economists are predicting relatively cool market conditions heading into 2019, as rising interest rates keep housing prices in check.

In fact, BMO senior economist Robert Kavcic is forecasting a small 1 percent year-over-year price bump this month.

“Recall that in [September], the median price gain across the 26 markets tracked was just under 3 percent year-over-year, confirming the relative home price stability across most of the country,” he writes, in his most recent analysis.

Townhouses are getting left in the dust

Faced with deteriorating affordability, many Canadians have turned to the new condo market as a more affordable shot at homeownership. It’s not just detached homes that have become less attractive.Townhome sales have also declined.

According to a new report from real estate company Altus Group, new townhouse sales fell in both Toronto and Vancouver in the first half of 2018.

“In the Greater Toronto Area, new townhouse sales have plummeted in the past 2 years – both in absolute terms and as percentage of total new home sales (to just 7 percent of the total in the first half of 2018),” reads the report.