Canada Housing Market

Canada’s housing market outlook has shifted again.

The Canadian Real Estate Association (CREA) has released its latest forecast for 2026 and 2027, painting a more cautious picture for home sales and price growth than it did just a few months ago. While affordability has improved in many parts of the country, economic uncertainty, slower population growth, and elevated inventory continue to weigh on the market.

So, what does this mean if you’re planning to buy or sell a home in Canada? Here’s a breakdown.

CREA Lowers Its Housing Market Expectations

In its July 2026 forecast, CREA revised its outlook for both home sales and prices.

The association now expects 463,336 homes to be sold through Canadian MLS® Systems in 2026, representing a 1.4% decline from 2025. That’s a notable change from its April forecast, when CREA expected sales to increase this year.

CREA says several factors have contributed to the weaker outlook, including:

• Slower population growth
• Continued economic uncertainty
• Elevated housing inventory in many markets
• Buyers remaining cautious despite improved affordability

Home Prices Are Expected To Stay Largely Flat

The latest forecast also suggests Canadian home prices will remain relatively stable.

CREA expects the national average home price to remain around $686,600 in 2026, with only modest changes expected across most provinces. In 2027, the national average price is forecast to rise 1.1% to approximately $694,164, remaining below the expected rate of inflation.

While prices aren’t expected to surge, they also aren’t forecast to experience widespread declines nationally.

Ontario And British Columbia Continue To Face The Most Pressure

Some of Canada’s most expensive housing markets continue to experience the greatest headwinds.

According to CREA, slower population growth and elevated inventory are having a greater impact in provinces like Ontario and British Columbia, where buyers have more options and sellers face increased competition.

Meanwhile, many Prairie and Atlantic Canadian markets are expected to remain relatively stable due to tighter supply conditions.

Mortgage Rates May Become Less Of A Concern

There is some positive news for buyers.

CREA notes that concerns about additional Bank of Canada interest rate hikes have eased considerably compared to earlier this year. Fixed mortgage rates also retreated after briefly rising in the spring, improving affordability for many borrowers.

While borrowing costs remain higher than they were during the pandemic, greater stability could encourage more buyers to re-enter the market.

Buyers May Continue To Have More Negotiating Power

With inventory remaining elevated in many regions, buyers are likely to continue benefiting from improved negotiating conditions.

Compared to the highly competitive market seen during the pandemic housing boom, many buyers today have:

• More homes to choose from
• More time to make purchasing decisions
• Greater ability to negotiate on price and conditions

That shift has helped reduce the urgency many buyers felt just a few years ago.

What It Means For Buyers

For prospective homebuyers, today’s market may offer one of the most balanced opportunities in several years.

Although mortgage rates remain higher than many would prefer, increased inventory and slower price growth mean buyers can often negotiate more favourable terms than they could during the pandemic-era market.

Rather than trying to perfectly time the bottom of the market, buyers should focus on purchasing when they’re financially ready and when a home fits their long-term needs.

What It Means For Sellers

For sellers, pricing strategy has become increasingly important.

Homes that are priced realistically and presented well continue to sell, while overpriced listings may spend longer on the market as buyers become more selective.

In markets with elevated inventory, sellers should also expect stronger competition from other listings.

The Bottom Line

Canada’s housing market hasn’t dramatically changed overnight, but CREA’s latest forecast suggests the recovery is likely to be slower than previously expected.

Home sales are now expected to decline slightly this year before recovering modestly in 2027, while home prices are forecast to remain relatively stable. For buyers, that could mean more opportunities and greater negotiating power. For sellers, it means adapting to a more balanced market where pricing and presentation matter more than ever.

References

• Canadian Real Estate Association (CREA): Quarterly Forecasts – July 15, 2026: CREA Quarterly Forecasts
• Canadian Real Estate Association (CREA): Housing Market Statistics: CREA Housing Market Statistics