Moody’s Analytics lowered its 2027 outlook as Q3 resales dropped and affordability stayed strained
Canada home prices ended the third quarter of 2026 down 1.1% from a year earlier, according to the RPS House Price Index, as Moody’s Analytics lowered its 2027 outlook for the country’s housing market – though the firm still expects a modest recovery to build gradually.
National resales fell 2.3% from August to September, breaking a tentative spring improvement.
Transactions slid 5.3% in Toronto and 6.2% in Vancouver, with Victoria posting a steeper decline still.
Ontario and British Columbia continued to absorb the sharpest corrections nationally, while Quebec City posted annual price gains of roughly 10%, ahead of Montreal and Regina.
For mortgage brokers, the data confirm what client conversations have flagged all year: eligible buyers are holding back.
Joel Fox, co-founder and chief operating officer of Ownright, an Ontario-based real estate law service, described the buyer mood in a May survey of more than 1,000 professionals across Canada.
“Even as prices decrease in some markets, buyers are taking more time, asking more questions, and trying to understand where the economy is headed before making a major financial decision,” Fox previously said.
“Uncertainty itself has become a market force.”
The Ownright Operators Report found that 40% of respondents cited economic anxiety, including recession fears, as the primary driver of hesitation, ahead of employment concerns (17%) and interest rates (15%).
Recession anxiety has become the top deal-killer for brokers across Canada, weighing on deal flow even where affordability has technically improved.
Benjamin Reitzes of BMO says affordability pressures, economic uncertainty, and higher mortgage costs continue to weigh on housing activity as the Bank of Canada projects limited support from the sector in the years ahead. https://t.co/3pPs39cmFM
— Canadian Mortgage Professional Magazine (@CMPmagazine) November 2, 2026
Ontario and BC bear the steepest declines
Regional fault lines remained entrenched through the period.
Construction offered little near-term relief – housing starts fell roughly 9% year over year during the third quarter – and Canada’s affordability recovery could go into reverse as builders scale back in response to soft demand.
The Canada Mortgage and Housing Corporation (CMHC), in its Fall 2026 Housing Supply Report published September 10, estimated that Canada needs between 417,000 and 469,000 starts annually through 2036 to restore pre-pandemic affordability, against a current pace of roughly 231,000 units.
Rate risk clouds the 2027 outlook
Moody’s Analytics projects price gains building gradually through 2027, with the Bank of Canada expected to hold its policy rate steady for most of the year.
Rising bond yields, however, could push fixed mortgage costs higher regardless of central bank decisions.
Meanwhile, Canadian Real Estate Association (CREA) cut its 2026 home sales forecast for a third consecutive quarter, projecting 444,530 residential transactions across Multiple Listing Service (MLS) Systems.
Desjardins Group separately projects Ontario’s existing home sales to rise nearly 5% in 2027, pointing to a modest provincial recovery even as rate-hike risk weighs on the outlook.
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