The Canadian Real Estate Association (CREA) has adjusted its prediction for home sales in 2026 downward, as new data reveals a slight increase in the number of homes sold in June compared to the previous month.
Rising oil prices have led to inflation and raised the possibility of the Bank of Canada increasing interest rates. This, in turn, has caused fixed mortgage rates to rise earlier this year due to an increase in bond yields. While these factors have somewhat alleviated since then, CREA states that they have still impacted the housing market in recent months, along with a faster-than-anticipated decline in Canada’s population.
According to the association, the national sales forecast for 2026 has been adjusted slightly lower due to a weak start to the year and a delayed recovery in the housing market. Initially, CREA had anticipated a minor rise in home sales for 2026, but now projects a 1.4% decline compared to 2025. This revision marks another downgrade for the 2026 forecast, following a previous adjustment earlier in the year.
Recent data for June indicated a 0.5% increase in national home sales compared to the previous month, with a 0.9% rise in monthly activity from June 2025. Shaun Cathcart, CREA’s senior economist, noted that this uptick continued the positive momentum seen in May, describing the current market as still in the process of stabilizing.
The MLS home price index reported a benchmark price of $657,700 for homes last month. While prices in regions like Ontario, B.C., and Alberta remained lower, Cathcart mentioned that these declines are shrinking, and prices across the country appear to be steadying.
Looking ahead, Cathcart anticipates slight improvements in the Ontario and B.C. markets by year-end, while regions like the Prairies and Quebec are witnessing a slowdown in activity. As market conditions normalize, he predicts a convergence towards more typical behavior.
With home prices showing signs of stabilization and interest rates remaining relatively stable, Cathcart believes that these factors could motivate potential buyers who have been hesitant to enter the market.
This evolving scenario may encourage more prospective buyers to take action, considering the current state of the real estate market.