The Canadian Real Estate Association (CREA) has adjusted its forecast for home sales in 2026, noting a slight increase in June compared to the previous month. This change follows a period of elevated inflation due to high oil prices, prompting concerns about potential interest rate hikes by the Bank of Canada, which led to an increase in bond yields and fixed mortgage rates earlier this year.
Although these pressures have somewhat subsided, CREA reports that they continued to impact the housing market along with a faster-than-anticipated decline in Canada’s population. Consequently, the national sales forecast for 2026 has been revised downward to reflect a sluggish first half of the year and a delayed recovery.
Initially anticipating a modest rise in home sales for 2026, CREA now expects a 1.4% decline compared to 2025. This revision marks another adjustment to the forecast, as CREA had previously downgraded its predictions for the current year in April.
Recent data indicates a 0.5% increase in national home sales in June from the previous month, with a 0.9% rise compared to June 2025. Shaun Cathcart, senior economist at CREA, noted that this positive trend builds on momentum seen since May, suggesting that the market is gradually stabilizing.
The MLS home price index revealed a benchmark price of $657,700 for homes in the last month. While prices in Ontario, B.C., and Alberta remained lower, the declines are narrowing, and prices across the country appear to be steadying.
Cathcart remarked on the changing landscape, highlighting an expected uptick in Ontario and B.C. markets by year-end, while regions like the Prairies and Quebec are experiencing a slowdown. With home prices stabilizing and interest rates holding steady, Cathcart speculates that these conditions could entice potential buyers to enter the market.