Apr 25, 2026
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Canada's spring housing market isn't picking up as quickly as expected, with a mix of economic uncertainty and shifting interest rate expectations keeping many buyers on the sidelines.
New data from Royal LePage shows the national aggregate home price fell 2% year-over-year in the first quarter of 2026, even as prices edged slightly higher compared to the end of last year.
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Meanwhile, the Canadian Real Estate Association (CREA) has lowered its forecast for 2026 (1), pointing to weaker-than-expected activity and a recent uptick in mortgage rates.
A slower start than usual
Spring is typically when Canada's housing market begins to pick up speed. This year, that momentum has been slower to build. A longer winter has played a role, according to Royal LePage, but broader concerns appear to be weighing more heavily.
Uncertainty around the economy, global tensions and the direction of interest rates has made some buyers more hesitant to act.
"In a typical spring, Canada's housing market would already be gaining momentum, but persistently low consumer confidence remains a drag on activity," said Phil Soper, president and CEO of Royal LePage.
That hesitation has been most visible in higher-priced markets. Home prices declined 4.7% in the Greater Toronto Area and 4.5% in Vancouver in the first quarter, while Montreal recorded a 3.3% increase.
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Rate uncertainty is changing behaviour
At the same time, expectations around borrowing costs have shifted again.
CREA noted that rising oil prices have increased the likelihood of a potential Bank of Canada rate hike later this year, pushing up bond yields and fixed mortgage rates in recent weeks.
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For many buyers, the biggest question mark is around timing as much as affordability. Some are choosing to wait for more clarity on where rates are headed, even if that means sitting out part of the spring market.
A muted outlook for 2026
According to their latest report, CREA now expects roughly 475,000 homes to be sold in 2026, representing a modest 1% increase over last year and a downgrade from earlier projections.
Price growth is also expected to remain limited. The national average home price is forecast to rise 1.5% to about $689,000, with little to no growth expected in BC, Ontario and Alberta.
In other regions, where prices climbed more sharply in recent years, gains are expected to fall within a more moderate range.
Demand is still there — just delayed
Even with the slower start, there are signs that interest hasn't disappeared from the market. Royal LePage noted that activity has begun to pick up in recent weeks, suggesting some buyers may be returning as conditions stabilize.
Survey data from the Bank of Canada also points to underlying demand, with nearly one-third of Canadians saying they are likely to move within the next year — up from 22% a year earlier.
For now, though, that demand isn't yet translating into a more active market. Buyers are taking more time, sellers are adjusting expectations, and many are still waiting to see how interest rates and the broader economy evolve before making a move.
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CREA (1)
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Steven Brennan is a freelance finance writer based in Vancouver, BC. He holds a BA and an MA from Maynooth University, Ireland. His work regularly appears at Canadian Mortgage Trends, Lowest Rates, Loans Canada and other Canadian and US brands, while also working as a ghostwriter for financial influencers.
