The Canadian Real Estate Association has lowered its 2026 housing market forecast after home sales came in weaker than expected through March and fixed mortgage rates moved higher following a spike in oil prices.
CREA had earlier expected stronger activity this year, driven in part by pent-up demand from buyers who had been waiting on the sidelines, including first-time homebuyers. That outlook shifted in late March as higher oil prices tied to instability in the Middle East fed inflation concerns and increased the likelihood of a Bank of Canada rate hike.
Those concerns pushed bond yields higher, which in turn drove up fixed mortgage rates and added new pressure to affordability in an already cautious housing market.
“Unfortunately, as it pertains to the forecast, we’ve had to change that and lower it because of the situation in the Middle East and the oil shock,” CREA senior economist Shaun Cathcart told CBC News.
Canadian home prices continue to soften
CREA said the national average home price, not seasonally adjusted, stood at $673,084 in March. That marked a 0.8 per cent decline from the same month last year.
The MLS Home Price Index also slipped 0.4 per cent from February, marking the 16th straight monthly decline. Year-over-year price weakness in B.C., Alberta and Ontario offset gains reported in other provinces.
Home sales remain below last year’s level
Sales recorded through Canadian MLS Systems were nearly unchanged in March, dipping 0.1 per cent month over month. Actual monthly sales activity, which is not seasonally adjusted, came in 2.3 per cent below March 2025.
CREA also reported 167,524 properties listed for sale across Canadian MLS Systems at the end of March. That was up one per cent from a year earlier, but still 10.6 per cent below the long-term average for that time of year.
Modest growth still expected in 2026
Despite the weaker outlook, CREA still expects the national average home price to rise 1.5 per cent annually to $688,955 in 2026.
The association projects little to no price growth in B.C., Alberta and Ontario, while other provinces are expected to see gains in the two to five per cent range.
CREA also expects national home sales to rise by one per cent in 2026, led mainly by B.C. and Ontario. Other provinces are expected to see modest increases or declines as higher borrowing costs continue to shape buyer decisions.
