The Canadian Real Estate Association (CREA) has updated its 2026 forecast for home sales activity and average home prices via the Multiple Listing Service® (MLS®) Systems of Canadian real estate boards and associations and extended the outlook to include 2027.

One year ago, expectations were that 2025 would mark a turning point, with buyers beginning to come off the sidelines after a significant slowdown across many Canadian housing markets. That slowdown coincided with the Bank of Canada’s use of higher interest rates to fight—and ultimately win—its first battle with inflation since adopting its inflation-targeting mandate in 1992.

While the economic uncertainty resulting from U.S. tariff threats ultimately resulted in another slow year for housing in 2025, most of that weakness was front loaded in the first months of the year. Beginning in April, the market underwent a rally that saw sales climb 12% by August. While this slowed into more of a holding pattern to finish the year, it’s that mid-year upward trend that is expected to pick up once again in 2026.

A major factor underpinning this forecast for higher activity in 2026 is pent-up demand, particularly from first-time buyers, many of whom have been shut out of the market over the past four years. While interest rates have not fallen as far as many may have hoped for, they have likely fallen far enough to restore the attainability of homeownership for many, despite affordability that remains more challenging than it was prior to 2020.

https://www.crea.ca/media-hub/news/crea-downgrades-resale-housing-market-forecast-amid-tariff-uncertainty-and-economic-uncertainty/