The Canadian Real Estate Association (CREA) has projected a significant recovery in the housing market, forecasting a 5.1 percent increase in national home sales by 2026. This forecast comes after a challenging period in 2025, characterized by a slowdown in the market due to tariff-related uncertainties. In addition to sales growth, CREA anticipates that the average national home price will appreciate by approximately 2.8 percent, reaching an estimated $698,881.
Shaun Cathcart, a senior economist at CREA, reflects on the previous year’s market conditions, noting that there was potential for first-time buyers to re-enter the market. He points out that a reduction in mortgage rates from six percent to around four percent could have encouraged new buyers, but the announcement of a 25 percent blanket tariff by the Trump administration abruptly halted optimism in the spring housing market of the previous year.
Phil Soper, president and CEO of Royal LePage, echoes this sentiment and emphasizes that prospective buyers now possess a considerable advantage compared to the previous year. With decreased borrowing costs, stable or declining property prices, and increased choices in a traditionally constrained inventory landscape, Soper believes that a favorable window of opportunity has emerged, particularly for first-time buyers in Canada’s highest-priced markets.
However, not everyone shares this optimistic outlook. Marc Ercolao, an economist at TD, points out that house sales have stabilized at lower levels due to the ongoing struggles with affordability, a lagging economy, and persistent buyer apprehension. He expresses concern that these economic uncertainties will continue to stifle sales levels throughout the year.
Furthermore, Clay Jarvis, a mortgage expert at NerdWallet Canada, provides a critical perspective on current market conditions. He acknowledges the increase in inventory and the decline in variable interest rates but argues that these factors may not significantly benefit consumers who are already facing increased debt or depleted savings. He highlights that any negative shifts in trade negotiations with the U.S. could lead to heightened financial anxiety among potential buyers, making them hesitant to invest in a home.
Lastly, Robert Kavcic, a senior economist at BMO, touches on the notion of pent-up demand resulting from low sales volumes in 2025. He raises the possibility of pent-up supply as well, suggesting that the market may see a significant number of listings that were previously withdrawn after failing to sell. This interplay of demand and supply dynamics will be crucial to observe as the spring market approaches.
This multifaceted analysis of the Canadian housing market highlights the delicate balance between optimism and caution as various economic factors continue to shape consumer behavior and market trends. With the approaching spring season, all eyes will be on how these projections materialize, with stakeholders considering both local dynamics and broader economic conditions.
