The Canadian Real Estate Association (CREA) has adjusted its forecast for home sales in 2026, lowering the expectations. Recent data indicates a slight increase in the number of homes sold in June compared to the previous month. Inflation driven by high oil prices had initially raised concerns about potential interest rate hikes by the Bank of Canada, leading to an increase in bond yields and fixed mortgage rates earlier this year.
Although these factors have somewhat alleviated, CREA mentions that they continued to impact the housing market in recent months, along with a faster-than-anticipated decline in Canada’s population. Consequently, CREA revised its national sales forecast for 2026 slightly downward due to a sluggish first half of the year and a delayed start to the anticipated market recovery.
Initially projecting a minor rise in home sales for 2026, CREA now anticipates a 1.4% decrease compared to 2025. This revision follows an earlier downgrade of predictions for the current year in April. June data revealed a 0.5% uptick in national home sales from the previous month, with a 0.9% increase compared to June 2025.
Shaun Cathcart, CREA’s senior economist, noted that the recent market improvement traces back to positive momentum beginning in May. The MLS home price index indicated a benchmark price of $657,700 for homes last month. While prices in Ontario, B.C., and Alberta were still declining regionally, Cathcart highlighted that these declines were narrowing, suggesting a stabilization of prices nationwide.
Looking ahead, Cathcart mentioned a slight expected uptick in the Ontario and B.C. markets by year-end, while regions like the Prairies and Quebec are experiencing a gradual slowdown. With home prices showing signs of stability and minimal fluctuations in interest rates, Cathcart suggested that these conditions could potentially entice hesitant buyers to enter the market.