Quick answer
- CREA cut its 2026 forecast on July 15 for two reasons it named directly: Canada's population growth slowed faster than expected, and fixed mortgage rates spiked earlier in the year on oil-price inflation.
- National home sales are now expected to fall by roughly 1.4% in 2026 versus 2025 — a reversal of the small annual gain CREA had projected in April.
- The national average home price is still expected to rise by about 1.1%, largely unchanged from April.
- Ontario is the only province forecast to see annual sales rise in 2026; Quebec and Atlantic Canada are cooling faster than April assumed.
- The OSFI B-20 stress test (the greater of contract rate plus 2% or 5.25%) has not changed — the revision changes the market backdrop, not the qualifying rules.
What just happened to the CREA forecast
If you have been trying to time the Canadian housing market this year, you have probably felt some whiplash. Home sales ticked up in June. Two weeks later, the Canadian Real Estate Association (CREA) — the national body representing most REALTORS in Canada — lowered its 2026 forecast again.
This is not a market crash signal. It is a routine mid-year adjustment. CREA updates its numbers each quarter based on what actually happened. On July 15, 2026, the association released its second revision of the year, and it landed softer than April’s.
If you are planning a purchase, a renewal, or a listing, the point is not to panic — it is to understand what changed, why, and what to do differently. You can also read the original CREA 2026 forecast for the April baseline this revision is built on.
What actually changed between April and July
The 2027 outlook is broadly positive. CREA now sees a rebound with national sales growth in the mid-single digits and continued modest price appreciation. That fits the pattern of the last two years: a slower first half, followed by a stronger second half. Bond yields have also drifted lower since fixed mortgage rates spiked earlier in the year, which may support second-half activity.
Quick start: pick your path
The two reasons CREA named for the downgrade
Population growth slowed faster than expected
Canada has been running unusually high population growth for the last few years, and that growth has fed housing demand. In 2026, the pace slowed more sharply than most forecasters had penciled in. Fewer new arrivals means fewer new households looking for homes, which shows up in resale numbers first.
Fixed mortgage rates spiked on inflation fears
Fixed mortgage rates follow the 5-year Government of Canada bond yield. That yield jumped when oil prices pushed inflation expectations up, and lenders repriced fixed mortgages accordingly. The Bank of Canada held its overnight rate at 2.25% at the July 15, 2026 announcement, but variable-rate borrowers had already lived through a spring of nervous headlines. Some buyers simply waited.
How the revision reads province-by-province
The national numbers hide a very uneven picture. Ontario is the only province CREA now forecasts to see sales rise in 2026 — an outlier position it earned by holding up during a soft spring. British Columbia is expected to see sales slip, along with a price decline of less than 1%. Ontario’s average price is also expected to dip slightly.
Alberta is the standout on the price side. After a soft start, Alberta prices resumed rising in the second quarter of 2026, helped by regional energy income. Newfoundland and Labrador remains, in CREA’s words, Canada’s last remaining full seller’s market — inventory is scarce and prices are still climbing meaningfully.
Quebec and Atlantic Canada tell the opposite story. Both are cooling faster than April expected, partly because they were more exposed to the slower population growth CREA cited as a driver.
Regional divergence like this is exactly why national averages can mislead a homebuyer. Razi Khan, Founder and Mortgage Broker at Pegasus, often reminds clients that no two mortgage files look the same — because no two housing markets do either.
How to adjust your homebuying plan in five steps
- 1Retest affordability against the stress testThe OSFI B-20 stress test still requires you to qualify at the greater of contract rate plus 2% or 5.25%. Run your numbers again with today’s rate quotes and confirm your qualifying amount before you shop.
- 2Refresh your pre-approvalA pre-approval typically holds a rate for up to 120 days. If yours is older than that, refresh it — and consider whether to lock a pre-approval now or wait.
- 3Focus on your province, not the countryOntario is running its own race. So is Alberta. So is Atlantic Canada. Whatever CREA’s national number is, your local market matters more.
- 4Plan around the next CREA updateThe next quarterly release is scheduled for Friday, October 16, 2026. If timing matters to your decision, calendar it and revisit your plan then.
- 5Speak with a broker before you commitBrokers work with multiple lenders — including banks, credit unions and trust companies — and can compare offers a single lender cannot. High-ratio files still involve CMHC, Sagen, or Canada Guaranty as the default insurer, each with slightly different guidelines.
Common mistakes buyers make after a forecast revision
- •Treating the forecast as prophecy. CREA’s numbers are a rolling projection, not a verdict. Read them as one input, not a decision.
- •Anchoring to national averages. Your purchase happens in one province, one city, one neighbourhood. Ask about your local market, not the country.
- •Waiting indefinitely for lower prices. A softer sales forecast rarely means a sharp national price drop. Match your timing to your life, not the news cycle.
- •Skipping a pre-approval refresh. A stale pre-approval may reflect old rates and old rules. Refresh before you make an offer.
- •Confusing the average price with your target range. The national average is context; your budget should be built around the home you actually want. See the wider debate on whether prices will fall for more perspective.
- •Ignoring the stress test cushion. The OSFI B-20 stress test already builds a rate buffer into every approval. Trust the process it created.
Frequently asked questions
For broader context, see the broader 2026 buyer’s outlook.
Why did CREA lower its 2026 housing forecast?
How much did CREA cut the 2026 forecast by?
Does the lower forecast mean home prices will drop?
Is it still a good time to buy a home in Canada in 2026?
Which province is doing best in the July 2026 forecast?
How does the CREA forecast affect my mortgage pre-approval?
Will fixed mortgage rates come back down?
When is CREA's next housing forecast update?
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About the author
Razi Khan
Founder, CEO & Licensed Mortgage Broker · Pegasus Mortgage Lending · Toronto, Ontario · FSRA Lic # 11479
Razi Khan is the Founder, CEO, and a licensed Mortgage Broker at Pegasus Mortgage Lending Center Inc., based in Toronto. With over 20 years of experience in the Canadian mortgage industry, Razi has personally guided more than 3,000 clients through some of the most complex and high-stakes financial decisions of their lives — from first-time purchases in the GTA to refinancing strategies, alternative lending solutions, and cross-border mortgages for Canadians buying in the United States.
Razi founded Pegasus in October 2008, launching the brokerage at the height of a global financial crisis. He works across the full spectrum of borrower profiles, with particular expertise in complex files including self-employed borrowers, credit-challenged clients, and investors building multi-property portfolios.
Learn more about Razi Khan →Sources & references
- CREA Quarterly Housing Market Forecast (July 15, 2026 release)
- CREA press release, Revises Resale Housing Market Forecast (July 15, 2026)
- CBC News: CREA downgrades housing market forecast again (July 15, 2026)
- Bank of Canada — Overnight rate held at 2.25% (July 15, 2026 announcement)
- OSFI Guideline B-20: Residential Mortgage Underwriting Practices
- CMHC — mortgage default insurance
- Sagen — mortgage default insurance
- Canada Guaranty — mortgage default insurance