The Canadian Real Estate Association (CREA) has adjusted its prediction for home sales in 2026, noting a decrease in the forecast. Despite this, recent data indicates a slight increase in home sales in June compared to the previous month.
Rising oil prices led to inflation, raising concerns about a potential interest rate hike by the Bank of Canada. This caused bond yields to rise and fixed mortgage rates to jump earlier this year. While these pressures have somewhat eased, CREA highlights that they continued to impact the housing market along with a faster-than-expected decline in Canada’s population.
The overall national sales forecast for 2026 has been slightly downgraded due to a weak start to the year and a delayed recovery in the housing market. Initially projecting a modest increase in home sales for 2026, CREA now anticipates a 1.4% decline compared to 2025, marking another revision downward for the year’s forecast.
June data reveals a 0.5% increase in national home sales from the previous month, with monthly activity up by 0.9% compared to June 2025. CREA’s senior economist Shaun Cathcart noted that this positive momentum began in May, indicating a market still in the process of stabilizing.
The MLS home price index reported a benchmark price of $657,700 last month. While prices in Ontario, B.C., and Alberta continued to dip, the rate of decline has been slowing down, suggesting a stabilization of prices nationwide.
Cathcart observed a shift in market dynamics, with Ontario and B.C. poised for slight improvements by the year’s end, while regions like the Prairies and Quebec are experiencing a deceleration in market activity.
As home prices reach a more stable phase and interest rates remain relatively unchanged, Cathcart suggests that these conditions may motivate potential buyers who have been hesitant to enter the market to take action.