As 2026 begins, Canada’s housing market appears to be finding its balance after several turbulent years.

Rate cuts over the past year have eased some of the pressure on borrowers and helped stabilize sales activity, particularly in markets that cooled the most during the downturn. At the same time, price growth has remained relatively contained, reflecting ongoing affordability challenges and limited supply.

Looking ahead, most forecasters expect the recovery to continue, but at a measured pace. While lower borrowing costs should support demand, higher household debt loads, renewal pressures and uneven regional conditions are expected to keep the market from overheating.

Below is a snapshot of the latest housing and interest rate forecasts for 2026 from major real estate firms and bank economists.

The Canadian Real Estate Association (CREA)

• 2026 home sales forecast: 509,479 (+7.7% year-over-year)
  • Commentary: “Since March 2025, home sales activity has been on a steady upward climb,” CREA said, adding that demand was “delayed and dampened, but not derailed.”
• 2026 home price forecast: $698,622 (+3.2%)
• Source

Royal LePage

• 2026 house price forecast by Q4: $823,016 (+1% year-over-year)
  • Commentary: “Solid market fundamentals – including lower interest rates, increased supply, and reduced competition – have created a more favourable environment for consumers,” said Phil Soper, president and chief executive officer, Royal LePage.
• Source

Re/Max

• 2026 national average price outlook: -3.7% year-over-year
• 2026 national home sales outlook: +3.4% year-over-year
  • Commentary: “Amid looming economic clouds, Canadians are maintaining their interest in homeownership,” said Don Kottick, president of RE/MAX Canada.
• Source

RBC Economics

• 2026 home resales forecast by Q4: 502,300 (+6.7% year-over-year)
• 2026 home price forecast by Q4: $812,700 (-0.9%)
  • Commentary: “With the central bank signalling it’s done this cycle, it could be the hint some buyers were waiting for to make a move,” wrote economist Robert Hogue.
• Source

TD Economics

• 2026 home price growth forecast: +4.1%
  • Commentary: “Canadian average home price growth was quite muted in November, and we think it will continue to grow at a sub-trend pace in coming quarters, weighed down by loose supply/demand balances in B.C. and Ontario,” wrote Rishi Sondhi.
• Source

2026 Interest Rate Forecasts

Most major banks expect the overnight rate to sit at 2.25% through much of 2026, reflecting a central bank that is broadly comfortable with inflation progress but cautious about declaring victory. After a sharp easing cycle in 2024 and early 2025, policy-makers are widely expected to adopt a wait-and-see approach, guided by incoming inflation and labour-market data.

By late 2026, however, forecasts begin to diverge. Scotiabank and National Bank see the policy rate edging higher by the fourth quarter, while RBC projects rate hikes extending into 2027, with the overnight rate rising back toward 3.25%.

The implication for borrowers is a more stable, but not permanently lower, rate environment. Variable-rate relief appears largely behind us, with the next phase likely defined by an extended hold rather than further cuts.