Mortgage Rate Spikes Lower 2026 Canadian Home Price and Sales Forecasts

Prospective homebuyers in April, May, and June are likely to remain on the sidelines as a mid-March jump in fixed mortgage rates increases borrowing costs. The Canadian Real Estate Association (CREA) warns the rate spike could "pull the rug out from under the spring market." This increase was triggered by bond yield rises and an oil price shock resulting from the Iran war. Market activity in March 2026 already showed a slowdown, with national home sales dipping 0.1% month-over-month and non-seasonally adjusted transactions falling 2.3% year-over-year. The national average home price fell 0.8% year-over-year to $673,084. Price declines were most acute in expensive markets; the Greater Toronto Area benchmark price fell 7.2% year-over-year to $928,000, and the Greater Vancouver Area fell 6.8% to $1,096,300. Conversely, Quebec City and Montreal saw benchmark price increases of 10.1% and 4.9%, respectively. CREA downgraded its 2026 forecast for residential property trades from 494,512 to 474,972, representing a growth projection of 1% compared to the 5.1% projected in January. The national average home price forecast for 2026 was revised downward to $688,955.