Canada’s Housing Market Finds Its Footing Again in 2026

Canada’s resale housing market is expected to regain forward momentum in 2026, according to the latest forecast from the Canadian Real Estate Association (CREA). After a choppy and uneven recovery through the second half of 2025, the year ahead is shaping up to be one of stabilization rather than a dramatic rebound.

Updated on January 15, CREA’s outlook revises expectations for 2026 and extends its forecast through 2027. The overall picture suggests a market that is gradually finding its footing, supported by pent-up demand and improved affordability conditions, even as economic uncertainty continues to temper buyer enthusiasm.

Nationally, CREA forecasts that 494,512 residential properties will change hands via MLS® Systems in 2026, representing a 5.1% increase compared with 2025. British Columbia and Ontario are expected to lead this recovery, with sales in both provinces projected to rise by more than 8%. These gains reflect the greater room for improvement following the sharper slowdowns experienced in those markets over the past few years.

In other parts of the country, sales growth is expected to be more modest. Many provinces are already operating closer to historical norms, and limited housing supply continues to constrain activity. As a result, the national recovery is likely to remain uneven, varying widely by region.

Home prices are also forecast to rise, though at a measured pace. CREA expects the national average home price to increase 2.8% in 2026, reaching $698,881. Price growth is projected to be more subdued in British Columbia, Alberta, Ontario, and Nova Scotia. Meanwhile, Saskatchewan, Quebec, and Newfoundland and Labrador are expected to see comparatively stronger gains.

Even in these hotter markets, however, CREA anticipates a cooling trend. After price growth in the 6% to 8% range in 2025, increases are forecast to slow to between 3% and 6% in 2026, signaling a more balanced environment overall.

Looking further ahead, CREA’s outlook for 2027 continues the theme of gradual improvement. National home sales are forecast to rise another 3.5% to 511,966 transactions, once again led by British Columbia and Ontario. Average home prices are expected to edge up 2.3% year-over-year to $714,991, marking the seventh consecutive year that the national average has hovered around the $700,000 mark.

The road to this steadier outlook hasn’t been smooth. CREA notes that 2025 ultimately proved slower than initially expected, largely due to economic uncertainty tied to U.S. tariff threats. Much of that softness was concentrated early in the year. Beginning in April, however, sales activity rebounded sharply, climbing 12% by August before settling into a holding pattern toward year-end.

That mid-year rebound is expected to resume in 2026, driven largely by pent-up demand, particularly among first-time buyers who have been sidelined for much of the past four years. While interest rates have not declined as steeply as many buyers hoped, CREA suggests they have fallen far enough to restore a degree of attainability.

The Bank of Canada’s signal on October 29, 2025, that rates were likely as low as they were going to get, is expected to further motivate buyers who had been waiting on the sidelines. With greater certainty around borrowing costs and continued demand pressure, CREA believes the market is entering a phase of renewed but restrained activity.