CMHC Adjusts Forecast: Home Sales and Prices to Decline in 2026

📅 2 weeks ago

Canada Mortgage and Housing Corporation revises its home sales and price forecast for 2026, citing economic uncertainty and high construction costs.

The Canada Mortgage and Housing Corporation (CMHC) has revised its forecast for the Canadian housing market, projecting a decline in both home sales and prices for the year 2026. This revision marks a significant downgrade from earlier predictions made in February, where the agency anticipated an increase in market activity compared to the previous year. CMHC now expects that the housing market will experience a downturn due to several factors, including economic uncertainties, slower population growth, and increased borrowing costs.
According to the agency's updated baseline forecast, the number of home sales is expected to reach 457,200 in 2026, a decrease from the 470,314 homes sold in 2025. Additionally, the average home price is projected to drop slightly to $675,200 from $679,543 in the previous year. This reflects a broader trend of diminishing sales and pricing power within the housing sector, which is being impacted by both domestic and international economic pressures.
The CMHC has also indicated that housing starts are anticipated to decline, with an expected 241,400 new homes being initiated in 2026, down from 259,028 in 2025. Builders are facing a challenging environment characterized by weak demand, high inventories, and elevated construction costs, which are further complicating their ability to meet market needs.
The agency has cited ongoing geopolitical tensions as a contributing factor to the current economic climate, as these tensions are likely to contribute to temporary inflation spikes. Furthermore, uncertainties surrounding Canada-U.S. trade relations are affecting investment and hiring decisions across the housing sector.
As the market navigates these challenges, the CMHC remains cautious about the future trajectory of home sales and pricing, suggesting that while a modest recovery is anticipated in the following years, the path ahead remains fraught with challenges. The agency's latest outlook underscores the importance of monitoring these factors closely as they will impact the housing market significantly in the near term.

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