The Canadian Real Estate Association (CREA) has adjusted its prediction for home sales in 2026, citing new data that shows a slight increase in home sales in June compared to the previous month. High oil prices led to inflation, prompting concerns about potential interest rate hikes by the Bank of Canada. This resulted in higher bond yields and an increase in fixed mortgage rates earlier this year.
Although these pressures have eased somewhat, CREA notes that they have still impacted the housing market in recent months, alongside a faster-than-expected decline in Canada’s population. As a result, the national sales forecast for 2026 has been slightly lowered due to a weak first half of the year and a delayed recovery in the housing market.
Previously anticipating a small uptick in home sales for 2026, CREA now expects a 1.4% decline compared to 2025. This revision marks another downgrade for the year’s forecast, following a previous adjustment in April.
June data revealed a 0.5% increase in national home sales compared to the previous month, with a 0.9% rise in monthly activity from June 2025. CREA’s senior economist, Shaun Cathcart, highlighted the positive momentum that began in May, describing the market as gradually gaining stability.
The MLS home price index indicated a benchmark price of $657,700 for homes in the past month. While prices in Ontario, B.C., and Alberta were still decreasing regionally, Cathcart noted that these declines were slowing down, and prices nationwide appeared to be leveling off.
Cathcart emphasized the shift towards more normal market behavior, with Ontario and B.C. markets expected to see slight improvements by year-end, while regions like the Prairies and Quebec are experiencing a slowdown.
Stabilizing home prices and relatively unchanged interest rates in recent months may prompt potential buyers to enter the market, encouraged by these market conditions.