Higher mortgage rates lock in lower housing activity as CREA cuts 2026 sales forecast

Canadian home sales lost ground in March as higher mortgage rates tightened their grip on buyer activity, pushing the Canadian Real Estate Association to cut its 2026 forecast by nearly 20,000 units. Sales dipped 0.1% from February and were down 2.3% annually, excluding seasonal adjustment, while the Home Price Index fell 0.4% for the month and 4.7% over the past year. The sales-to-new listings ratio held at 47.8%, below the long-term average, signaling sustained buyer-side leverage in the market. A mid-March jump in fixed mortgage rates—driven by higher inflation and global economic uncertainty—further dampened momentum. CREA now expects 474,972 residential sales in 2026, down from its January forecast of 494,512. The 20,000-unit revision underscores how elevated borrowing costs are reshaping long-term housing demand.