CREA downgrades housing market forecast again as June home sales edge up

The canadian river existent acres connexion (CREA) revised its place sales forecast for 2026 downward, while new data shows the number of homes sold in June ticked up slightly from the month before.

High oil prices fuelled inflation and spurred the possibility that the Bank of Canada would raise interest rates, sending bond yields up and causing fixed mortgage rates to jump earlier this year. 

These factors have eased somewhat since then, according to CREA, but the association says they still weighed on the housing market in recent months — as did a quicker-than-expected drop in Canada's population.

"Taken together, the national sales forecast for 2026 was revised slightly lower, reflecting the weak first half of the year, and slightly delayed start to the long-awaited recovery" in the housing market, the association said in a release.

CREA had previously predicted a small increase in the number of homes sold in 2026, but it now expects a 1.4 per cent decline compared to 2025. The revision is another downgrade for the 2026 forecast, as CREA already revised its predictions for this year downward in April.

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Data for June showed that national home sales edged up by half a percentage point from the month before, and monthly activity was up 0.9 per cent compared to June 2025.

CREA's senior economist Shaun Cathcart said the uptick built on positive momentum in the market that started in May.

"It's a market that's only just finding its footing," Cathcart said.

The MLS home price index showed the benchmark price of a home was $657,700 last month.

Regionally, prices in were still down in Ontario, B.C. And Alberta. But Cathcart said those declines have been shrinking, and prices across the country seem to be stabilizing.

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"The last four years have … been a story of a really ice cold Ontario, a pretty chilly B.C. And hot markets everywhere else," Cathcart said.

Now, he says the Ontario and B.C. Markets are expected to tick up slightly by the end of the year, while places like the Prairies and Quebec are starting to see a slowdown.

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"It's really a convergence on more normal behaviour," Cathcart said.

With home prices stabilizing and little change in interest rates in recent months, Cathcart says it's possible these factors could encourage some prospective buyers to come off of the sidelines. 

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