National sales forecast revised to a 1.4% annual decline as regional divergence deepens
The Canadian Real Estate Association (CREA) has cut its 2026 resale housing forecast for the second time this year, now projecting 463,336 properties to change hands through Multiple Listing Service® (MLS®) Systems. That's a 1.4% decline from 2025 that reverses the modest gain the association had anticipated as recently as April.
Released on July 15, alongside June sales data, CREA's revised outlook reflects the weight of a difficult first half shaped by oil-price-driven inflation fears, elevated fixed mortgage rates, and a faster-than-expected decline in population growth that has hit certain provinces disproportionately hard.
The national average home price is forecast to rise 1.1% this year to $686,710, roughly $2,000 below CREA's spring projection.
In June, the actual national average sale price reached $696,078, up 0.5% year-over-year, according to CREA's July 15 data release.
The composite MLS® Home Price Index (HPI) held flat on a monthly basis for the first time since January 2025, though it remained 3.6% below June 2025 levels, indicating that broader price recovery is still tentative.
Rate environment weighs on affordability
The five-year Government of Canada (GoC) bond yield, the primary benchmark lenders use to price fixed-rate mortgages, has been trading near 3.1% in July 2026, according to rate analysis by nesto.ca, after spiking to approximately 3.18% in early July amid renewed geopolitical tensions and elevated oil prices.
That has kept five-year fixed insured rates above 4%, a level that has tested buyer affordability and kept many brokers watching for a meaningful demand catalyst in the resale market.
CREA's updated forecast notes that Bank of Canada rate hikes this year have "mostly been taken off the table," a signal likely to reassure both fixed- and variable-rate borrowers. The overnight rate has held at 2.25% since October 2025.
Canada's national aggregate home price fell 1.4% year over year to $814,900 in the second quarter of 2026, according to the Royal LePage House Price Survey and Market Forecast released Tuesday.https://t.co/8rVwrl1UIL
— Canadian Mortgage Professional Magazine (@CMPmagazine) July 14, 2026
A country pulling in different directions
Ontario is now the only province CREA expects to record annual sales growth in 2026 versus 2025, building on the momentum that carried national home sales meaningfully higher in May after a subdued spring.
Quebec and Atlantic Canada face a tougher picture, with sharply declining population growth compounding historic supply shortages to erode demand faster than models had forecast. Ontario is now the key engine of whatever recovery materialises in the second half.
Alberta stands out on price, with benchmark values resuming their upward trajectory in the second quarter of 2026.
Newfoundland and Labrador retains its position as the lone province in full seller's market territory.
Looking to 2027, CREA forecasts sales rising 3.7% to 480,567 units nationally, with average prices climbing a further 1.1% to $694,164. That projection assumes stable interest rates and modest economic growth, conditions that have proven difficult to sustain across three consecutive spring markets.
Should those conditions hold, 2026 and 2027 would mark the sixth and seventh consecutive years the national average price hovers near the $700,000 mark.
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