After a year marked by hesitation and economic uncertainty, Canada’s resale housing market is expected to regain momentum in 2026 and continue building through 2027, according to a newly updated forecast by the Canadian Real Estate Association (CREA).
The outlook notes 2025 was a transition year rather than a true recovery. While earlier expectations had pegged last year as a turning point, higher interest rates and broader economic uncertainty — particularly tied to U.S. tariff threats — kept many prospective buyers on the sidelines longer than anticipated. Still, the latter half of 2025 offered a glimpse of what may be ahead.
Beginning in Spring 2025, sales activity rebounded sharply, climbing 12 per cent by August before levelling off near the end of the year. CREA expects that mid-year rally to resume and strengthen in 2026 as confidence gradually returns to the market.
A key driver behind the improved outlook is pent-up demand, especially among first-time homebuyers who have faced four years of deteriorating affordability. While interest rates have not fallen as dramatically as many hoped, CREA believes they have eased enough to restore attainability for a meaningful share of households.
That shift in sentiment was reinforced late last year. CREA stated, “A significant milestone was reached on Oct. 29, 2025, when the Bank of Canada indicated clearly that rates were likely about as good as they were going to get.” That signal alone may be enough to draw in prospective homebuyers who had been waiting on the sidelines for clarity before committing to a fixed-rate mortgage.
The policy interest rate currently stands at 2.25 per cent. The Bank of Canada’s next update is scheduled for Jan. 28, 2026, along with this year’s first monetary policy report.
The return of first-time homebuyers could have outsized effects on supply. Unlike move-up homebuyers, they remove homes from the market without adding new listings, which could accelerate inventory decreases in markets where supply is already tight.
Nationally, CREA forecasts that 494,512 residential properties will change hands in 2026, a 5.1 per cent increase from 2025. Activity is expected to climb further in 2027, reaching 511,966 unit sales, up another 3.5 per cent year-over-year.
The recovery, however, will not be evenly distributed.
British Columbia and Ontario — where sales fell the furthest during the prolonged slowdown — are forecast to post the strongest rebounds, with sales rising by more than eight per cent in 2026 in each province. B.C. sales are forecast to rise from about 70,000 units in 2025 to over 76,000 units in 2026 and over 79,000 units in 2027, while Ontario is expected to see transactions increase from roughly 163,000 units in 2025 to over 177,000 units in 2026 and more than 186,000 in 2027.
In contrast, Prairie provinces, Quebec, and Atlantic Canada are projected to see more modest gains. Alberta’s sales are forecast to rise from 77,000 units in 2025 to just under 79,000 units in 2026 and nearly 80,000 units in 2027. Unlike B.C. and Ontario, these regions entered the slowdown with higher baseline activity and tighter supply, leaving less room for a dramatic rebound.
On the pricing side, CREA is forecasting a calmer, more sustainable trajectory than what Canadians experienced earlier this decade.
The national average home price is expected to rise by 2.8 per cent year-over-year in 2026 to $698,881, followed by a 2.3 per cent increase in 2027 to $714,991. If realized, that would mark the seventh consecutive year that the national average has hovered near the $700,000 mark.
B.C. and Ontario, already the country’s most expensive markets, are forecast to post relatively modest gains after declines in 2025. Alberta continues to stand out for its relative affordability, with prices projected to rise steadily but remain well below the national average. Saskatchewan, Quebec, and Newfoundland and Labrador are expected to see stronger price growth than the national average, though CREA notes that those gains are slowing compared with 2025.
CREA states the previous substantial home price increase trend “has been bolstered by record population growth up until recently, [and] price gains in those hotter markets are forecast to be markedly lower than the gains recorded in 2025,” with the forecast expecting it will fall from the six to eight per cent range in 2025 to the three and six per cent range in 2026.
Even though more homes are expected to sell in the coming years, activity is still nowhere near the frenzied pace seen during the pandemic. Home prices, meanwhile, are starting to level out after climbing steadily for decades, especially since the early 2000s.
Overall, the forecast suggests the housing market will settle down rather than heat up. Any increase in buying and prices is likely to be slow and steady, driven more by people who have been waiting to buy a home — and who now feel more confident — than by investors or speculation.