CREA Downgrades 2026 Home Sales Forecast Amid Economic Uncertainty
The Canadian Real Estate Association (CREA) has announced a downgrade to its 2026 national home sales forecast, pointing to persistent global economic uncertainty as a key factor. This revision follows the release of weak sales data for March 2026, which showed home purchases lagging behind previous years.
Weak March Numbers Prompt Forecast Revision
According to CREA, home sales activity in March remained at lower levels, with purchases last month falling 2.3% below March 2025. Month-over-month sales across the country were nearly unchanged, showing a slight decline of 0.1%. Shaun Cathcart, CREA's senior economist, highlighted in a statement that rising global economic uncertainty, combined with a mid-month jump in fixed mortgage rates linked to higher inflation, contributed to an already shaky economic start to the year.
Cathcart explained, "The timing of higher mortgage rates, along with the perception they may be temporary, could keep would-be buyers away at the most active time of year—April, May, and June—as they wait for rates to come back down." He noted that while the year may see a modest amount of increased sales and price stability, the forecast has been adjusted to reflect fewer homes being sold overall.
Supply and Listings Trends
In addition to sales declines, new listings edged down by 0.2% on a month-over-month basis in March. This decrease could be attributed to new homes being available at the lowest levels since mid-2024. At the end of March, there were 167,524 properties listed for sale on all Canadian MLS Systems, which is just 1% higher than a year earlier. However, this number remains 10.6% below the long-term average for that time of year.
CREA reported that overall supply has generally been declining since May of last year, indicating a tightening market. Garry Bhaura, CREA's 2026-27 chair, commented, "While the interest rate situation has recently changed, what could be a challenge for a buyer looking for a fixed rate mortgage may also be seen as more choice and less competition for those choosing a variable rate."
Price Movements and Market Outlook
The national average sale price saw a decline of 0.8% on a year-over-year basis last month, reflecting broader market adjustments. Bhaura added, "Spring tends to be a busier time of year for the housing market, even if it may not be quite as busy as we were expecting not so long ago." This suggests that while seasonal activity may provide some boost, it is unlikely to meet earlier optimistic projections.
Key factors influencing the market include:
- Global economic instability affecting buyer confidence.
- Rising fixed mortgage rates tied to inflation pressures.
- Declining new listings and supply levels.
- Potential shifts in buyer behavior towards variable rate mortgages.
As the housing market navigates these challenges, stakeholders are closely monitoring trends for signs of recovery or further downturns in the coming months.
