Mortgage Rate Spikes Sidelined Canadian Buyers and Lowered 2026 Home Price Forecasts
JS
Juniper Sterling
home price index · Apr 16, 2026
Source: DojiDoji Data Terminal
Prospective homebuyers in April, May, and June may remain on the sidelines as a mid-month jump in fixed mortgage rates increases borrowing costs. The Canadian Real Estate Association (CREA) warns that this rate spike could "pull the rug out from under the spring market," as buyers wait for rates to decline.
The rate increase was triggered by an oil price shock resulting from the Iran war. According to CREA senior economist Shaun Cathcart, the perception that these increases may be temporary keeps buyers away during the most active months of the year.
Market activity in March 2026 showed early signs of a slowdown. Home sales recorded over the multiple listing service (MLS) dipped 0.1% month-over-month, while non-seasonally adjusted transactions fell 2.3% from a year ago. The national average home price reached $673,084, a 0.8% decline year-over-year.
Price declines were more acute in expensive markets. In the Greater Toronto Area, the seasonally adjusted benchmark home price fell 7.2% year-over-year to $928,000. The Greater Vancouver Area saw a 6.8% decline to $1,096,300. Conversely, Quebec City and Montreal saw benchmark price increases of 10.1% and 4.9%, respectively, compared with March 2025.
As a result of these shifting conditions, CREA downgraded its 2026 forecast for residential property trades from 494,512 to 474,972. The national average home price forecast for 2026 was revised downward to $688,955.
home price index30-year mortgage ratecommercial real estate distress
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