As 2026 begins, Canada’s housing market appears to be finding its balance after several turbulent years.
Rate cuts over the past year have eased some of the pressure on borrowers and helped stabilize sales activity, particularly in markets that cooled the most during the downturn. At the same time, price growth has remained relatively contained, reflecting ongoing affordability challenges and limited supply.
Looking ahead, most forecasters expect the recovery to continue, but at a measured pace. While lower borrowing costs should support demand, higher household debt loads, renewal pressures and uneven regional conditions are expected to keep the market from overheating.
Below is a snapshot of the latest housing and interest rate forecasts for 2026 from major real estate firms and bank economists.
Real estate market
The Canadian Real Estate Association (CREA)
- 2026 home sales forecast: 509,479 (+7.7% year-over-year)
- Commentary: “Since March 2025, home sales activity has been on a steady upward climb,” CREA said, adding that demand was “delayed and dampened, but not derailed.”
- 2026 home price forecast: $698,622 (+3.2%)
- Source
Royal LePage
- 2026 house price forecast by Q4: $823,016 (+1% year-over-year)
- Commentary: “Solid market fundamentals – including lower interest rates, increased supply, and reduced competition – have created a more favourable environment for consumers,” said Phil Soper, president and chief executive officer, Royal LePage. “First-time buyers and those searching in the country’s most expensive regions have a rare window to act on their home ownership plans at reduced prices. While we don’t expect a sharp rebound, this improved affordability will rebuild market confidence among both buyers and sellers, setting the stage for more sustainable, albeit modest, price growth in 2026.”
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Re/Max
- 2026 national average price outlook: -3.7% year-over-year
- 2026 national home sales outlook: +3.4% year-over-year
- Commentary: “Amid looming economic clouds, Canadians are maintaining their interest in homeownership,” said Don Kottick, president of RE/MAX Canada. “The resilience that began to emerge in the fall is anticipated to continue into 2026, with first-time buyers in particular finding creative ways to save and enter the market.”
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RBC Economics
- 2026 home resales forecast by Q4: 502,300 (+6.7% year-over-year)
- 2026 home price forecast by Q4: $812,700 (-0.9%)
- Commentary: “With the central bank signalling it’s done this cycle, it could be the hint some buyers were waiting for to make a move,” wrote economist Robert Hogue. “We expect past rate reductions and price drops in certain markets to draw more buyers from the sidelines in the year ahead, unlocking some pent-up demand accumulated during the period of elevated borrowing costs.”
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TD Economics
- 2026 home price growth forecast: +4.1%
- Commentary: “Canadian average home price growth was quite muted in November, and we think it will continue to grow at a sub-trend pace in coming quarters, weighed down by loose supply/demand balances in B.C. and Ontario,” wrote Rishi Sondhi. “In contrast, tighter markets should fuel stronger price gains elsewhere in the country. Indeed, Quebec looks like a prime candidate for price outperformance in 2026…with supply/demand conditions strongly in the favour of sellers heading into 2026.”
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2026 interest rate forecasts
As we look ahead to 2026, the focus has shifted from how quickly the Bank of Canada might cut rates to how long it will remain on hold, and when the next move could eventually be higher.
Most major banks expect the overnight rate to sit at 2.25% through much of 2026, reflecting a central bank that is broadly comfortable with inflation progress but cautious about declaring victory. After a sharp easing cycle in 2024 and early 2025, policy-makers are widely expected to adopt a wait-and-see approach, guided by incoming inflation and labour-market data.
By late 2026, however, forecasts begin to diverge. Scotiabank and National Bank, for example, see the policy rate edging higher by the fourth quarter, while RBC projects rate hikes extending into 2027, with the overnight rate rising back toward 3.25%.
TD expects the policy rate to remain unchanged through the end of 2027. CIBC and BMO’s latest published forecasts also point to rates holding steady through 2026, though neither has released formal projections beyond that point.
The implication for borrowers is a more stable, but not permanently lower, rate environment. Variable-rate relief appears largely behind us, with the next phase likely defined by an extended hold rather than further cuts. Fixed mortgage rates may also face upward pressure over time as markets begin to price in the possibility of future tightening.
In short, 2026 is shaping up as a year of rate stability, but with growing discussion around what comes next as the economic cycle matures.
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Last modified: January 2, 2026