Economists are cautioning that a housing market rebound in 2026 is increasingly unlikely, based on the latest data released Thursday by the Canadian Real Estate Association (CREA). The numbers reveal persistent weakness in sales and prices, dimming hopes for a swift recovery.
Sales and Prices Continue to Slide
April sales edged up 0.7% from March, but Douglas Porter, chief economist at Bank of Montreal, noted that this modest increase is hardly a sign of a spring revival. Sales remain 4% below year-ago levels and 10% off the seasonal norm. Home prices are down 4% from a year ago and 20.5% below the pandemic peak in February 2022.
“At this point in the year, the chance for a full-blown housing rebound has likely slipped away,” said Clay Jarvis, a mortgage expert at NerdWallet Canada.
Regional Variations and Optimism
Toronto-Dominion economist Rishi Sondhi offered a slightly more optimistic view, noting that Ontario posted a solid 4.3% month-over-month sales gain and the national average home price rose 2.6% in April from March. However, he acknowledged that the sales-to-new-listings ratio remains well below the long-term average, signaling only modest price growth ahead.
TD forecasts an increase in prices and sales for the second quarter, but Sondhi stressed this would only partially offset first-quarter weakness, leaving a subdued first-half picture.
Economic Headwinds Persist
The housing market faces significant headwinds, including weak population growth, elevated supply in key markets, and a shaky jobs picture. Porter pointed out that the current sales-to-new-listings ratio suggests further price declines are needed to improve affordability, which remains far below historical norms despite recent price drops and lower interest rates.
On a provincial level, Ontario and British Columbia—traditionally the country's housing leaders—have been the biggest drags on the market. Other once-solid regions like Edmonton, Winnipeg, and Halifax saw double-digit sales declines, while Calgary experienced a nearly 10% drop in sales and a decline in its home price index.
“Given the lingering affordability issues in many regions and the now-distant prospect of further rate cuts by the Bank of Canada, it's tough to see the market springing to life anytime soon,” Porter concluded.
