Canada’s expected spring housing rebound has lost momentum, prompting the Canadian Real Estate Association to lower its 2026 market forecast after softer sales in the first three months of the year and a late-March rise in fixed mortgage rates. The downgrade marks a setback for a market that had been expected to pick up this year, especially with many first-time buyers seen as waiting for the right moment to return.
CREA had earlier expected stronger activity in 2026, driven in part by pent-up demand. That view changed in the second half of March, when inflation linked to a spike in oil prices raised expectations of a possible Bank of Canada rate hike. That pushed bond yields higher and led fixed mortgage rates to jump.
Cathcart said the timing has hurt the market at a critical point in the calendar. Spring usually brings the busiest stretch of the year for home buying, but the recent increase in borrowing costs, along with the sense that rates might ease again later, could leave many buyers waiting rather than moving ahead now.
The latest data show little sign of a strong turnaround. Home sales recorded over Canadian MLS Systems slipped 0.1 per cent from February on a month-over-month basis. On an actual, non-seasonally adjusted basis, March activity was 2.3 per cent lower than in March 2025.
The non-seasonally adjusted national average home price was $673,084 in March, down 0.8 per cent from a year earlier. CREA also said the MLS Home Price Index fell 0.4 per cent month over month, extending its decline to a 16th straight month.
Price weakness in B.C., Alberta and Ontario outweighed gains seen in other provinces. Meanwhile, 167,524 properties were listed for sale across Canadian MLS Systems at the end of March. That was up one per cent from a year earlier, though still 10.6 per cent below the long-term average for that time of year.
Even with the downgrade, CREA still expects some growth this year. The association forecasts the national average home price will rise 1.5 per cent in 2026 to $688,955. It expects little to no price growth in B.C., Alberta and Ontario, with gains of between two and five per cent in other provinces.
CREA is also forecasting a one per cent increase in national home sales for 2026, with much of that gain expected to come from B.C. and Ontario. Sales in other provinces are expected to rise modestly or fall.
Cathcart said broader global instability is shaping buyer sentiment as much as domestic conditions. “It’s not a matter of getting a forecast wrong. It’s a matter of these massive global disasters, really, that continue to unfold,” Cathcart said. “I think we just have to cross our fingers that maybe this is the last big one for a while.”
If borrowing costs stay elevated and uncertainty deepens, Canada’s housing market could face another uneven year despite forecasts for modest growth.
