The Canadian Real Estate Association (CREA) has adjusted its prediction for home sales in 2026, lowering the forecast. However, recent data indicates a slight increase in the number of homes sold in June compared to the previous month.
Rising oil prices have led to inflation and speculation about potential interest rate hikes by the Bank of Canada, causing bond yields to rise and fixed mortgage rates to surge earlier this year. While these pressures have somewhat alleviated, CREA notes that they have still impacted the housing market in recent months, alongside a faster-than-anticipated decline in Canada’s population.
The revised national sales forecast for 2026 reflects a minor decrease due to a sluggish start to the year and a delayed recovery in the housing market. Initially anticipating a slight uptick in home sales for 2026, CREA now projects a 1.4% decline compared to 2025, marking another adjustment following a previous downgrade earlier in the year.
June data reveals a 0.5% uptick in national home sales from the prior month, with monthly activity up by 0.9% compared to June 2025. CREA’s senior economist, Shaun Cathcart, noted that this growth builds on positive momentum seen in May, indicating a market that is gradually stabilizing.
The MLS home price index shows a benchmark price of $657,700 for homes in the previous month. While prices in Ontario, British Columbia, and Alberta have seen declines, these decreases are narrowing, with prices across the country showing signs of stabilization.
Cathcart highlighted a shift towards more typical market behavior, with expectations of slight improvements in Ontario and British Columbia by year-end, while regions like the Prairies and Quebec are experiencing a slowdown.
With home prices steadying and interest rates remaining relatively unchanged, Cathcart suggests that these conditions could prompt potential buyers to enter the market after observing from the sidelines.
