The Canadian Real Estate Association (CREA) has adjusted its 2026 home sales forecast downward, as recent data reveals a slight increase in the number of homes sold in June compared to the previous month. Rising 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 earlier spike in fixed mortgage rates earlier this year.
Although these pressures have eased somewhat, CREA notes that they still had a dampening effect on the housing market in recent months. Additionally, a faster-than-expected decline in Canada’s population also impacted market conditions. As a result, CREA revised its national sales forecast for 2026 slightly lower due to a sluggish first half of the year and a delayed housing market recovery.
Previously anticipating a modest increase in home sales for 2026, CREA now projects a 1.4% decline compared to 2025. This adjustment marks another revision to the 2026 forecast after CREA had already revised down its predictions for the year earlier in April.
In June, national home sales inched up by 0.5% from the previous month, with a 0.9% increase in activity compared to June 2025. Shaun Cathcart, senior economist at CREA, emphasized that this growth builds on positive market momentum starting in May, indicating a market that is slowly stabilizing.
The latest MLS home price index reported a benchmark price of $657,700 for homes in the previous month. While prices in Ontario, B.C., and Alberta still showed declines, Cathcart highlighted that these decreases are narrowing, suggesting a trend toward price stabilization nationwide.
Looking ahead, Cathcart expects slight improvements in the Ontario and B.C. markets by the year’s end, while regions like the Prairies and Quebec are experiencing a gradual slowdown. With home prices steadying and interest rates remaining relatively unchanged recently, Cathcart believes these factors could entice potential buyers to engage more actively in the market.
Overall, the real estate market is showing signs of normalization, with a convergence toward more typical market behavior expected in the near future.