Forecasting home prices and market trends from 2025 to 2029.
How might tariffs and interest rates impact Canada's home prices? What places in Canada offer better affordability? Is it a buyer's or seller's market? Here's a look at the latest trends and what they may signal.
According to CREA's latest report, Canada's national housing market momentum stalled again in December 2025, with declines in sales, prices, and listings pulled down by a few regions — despite lower mortgage rates following the Bank of Canada's rate cuts in Fall 2025.
Experts are hoping for a thaw as we head into 2026, helped by freshly lower mortgage rates that could entice many buyers and sellers to jump into the market, and BoC comments that interest rates likely won't go lower in 2026.
Next CREA update on February 15, 2026
$660,300 in December 2025 (a decrease of 0.7% m/m from November's $665,100)
This statistic logged a 4% year-over-year decline and was 22% below the $841,900 peak MLS®HPI recorded in March 2022.
(as per MLS® HPI Aggregate Composite Benchmark, not seasonally adjusted; the March 2022 peak home price was recently adjusted down from $841,800)
Recent rate drops are expected to aid a soft recovery this year, with trade uncertainty the wild card in homeownership decisions.
More home buyers and sellers moved to the sidelines at the end of 2025, waiting for clarity on the financial and economic front after Trump took a wrecking ball to the Canada–U.S. trade relationship. Re/Max reported that home sales fell in 19 of 33 Canadian markets in 2025.
Recent Bank of Canada rate cuts, as well as federal government incentives, such as GST relief for first-time home buyers of newly built homes, may motivate some to make their move. An additional 3% of homeowners surveyed by Re/Max intend to purchase in 2026 — an improvement, though well short of a potential full-blown recovery.
Some experts see this as a transition year, as Canadians navigate uncertainty to once again invest in their future through housing decisions, while interest rates and housing demand remain tempered.
Read on for what some housing experts are expecting for this year and beyond.
"With interest rates more or less where they are, I think the housing market can show nice recovery in 2027.”
– Benjamin Tal, Deputy Chief Economist, CIBC Captial Markets Inc., The Globe and Mail, Jan. 16, 2026
Note: All forecasts above are compiled from public market data and are subject to change.
Are housing forecasts for real, or are they 'Pin the Tail on the House Donkey' in predicting home sales and prices?
Housing experts can differ widely in their expectations for our national housing market. That's partly due to Canada's size, with regional differences often skewing the big picture — for example, Vancouver and Toronto's higher prices and volume of activity compared to the rest of the country.
Housing stat sources are also notoriously difficult to compare like-for-like, as different variables may be presented or available (e.g., seasonal vs. non-seasonal), exclude some markets, or rely on 'in-house' data that may not align on a national scale.
It's time to see how the 2025 forecasts stacked up! We did not break out the sparklers, but we did compare the predictions with the actual results to see who pinned it the closest. See below!
Tight home affordability in Canada has eased slightly in the last few months as variable and fixed mortgage rates, as well as home prices, have cooled from last year. However, home prices in Canada are still among the highest of the G7 countries (led by the major city centres of Vancouver and Toronto).
Here's what may help keep price growth in check to either deter demand or increase supply:
In 2023, we saw a whopping 46% increase in Canadian newbies waving the red maple leaf. The federal government began curbing immigration in 2024, and the temporary resident outflow exceeded 660K that year. Increased tightening and outflow are expected to continue for 2026.
Still, our rapid population growth over the past few years, combined with not enough housing starts to keep pace, continues to put forward pressure on Canada's housing supply, which could still send home prices upwards, not downwards. Not to mention all the first-time buyers who are looking for a chance to enter the market, which if affordability improves, could add to supply strain.
Factors that might affect the pace of home building:
Federal, provincial, and city governments are furiously trying to clear the road to increase starts or boost the incentive to improve starts, but they face multiple roadblocks.
NIMBYism (not in my backyard) is another major obstacle to slapping up multi-dwelling housing in existing neighbourhoods that would ease the strain. Calgary and Edmonton had some success getting shovels in the dirt through fast-introduced legislation that allowed more 'missing middle' buildings (2-8 plexes) within established neighbourhoods. However, in Calgary, that legislation has been repealed, as its new mayor responds to the neighbourhood backlash that followed the sudden blanket rezoning, which now threatens access to government housing funds that came with it.
Several forces in Canada appear to be at odds, hindering the pace of the Canadian housing inventory needed to meet current and future needs. We're not talking here about housing for low-income needs, which is also very urgent and essential — we're talking about enough housing to meet the general demands of an existing and growing population.
Canada is down by over 5 million homes needed by 2030 (on top of annual construction). The lack of inventory won't help stabilize home prices unless reasonably addressed in the coming years.
The current federal government has launched a Build Canada Homes initiative to help construct approximately 500,000 new homes per year over the next decade.
Mobile, manufactured, and modular homes, installed on real property (owned by you), can significantly speed up building and move-in timelines, and reduce costs, compared to site-built homes, which depend on weather, labour, and material availability.
However, in many city centres, zoning and bylaws restrict how quickly these homes can roll in — effectively capping demand.
That zoning bottleneck, combined with financial and space constraints to go from production to installation, makes it difficult for manufacturers to scale up and fully realize time and cost efficiencies.
Easier access to capital and lending tied to real property could help this sector play a stronger role in easing Canada's housing crunch.
Read more here: How Mortgages Work for Prefabricated Homes
The prime rate dropped by another 1.0% in 2025, bringing variable and fixed mortgage rates along with it (though fixed rates haven't fallen as far, tied to bond yields fluctuations rather than prime rate movements). Typically, lower interest rates attract buyers and boost housing demand. But this time around, an ongoing trade war with the U.S. is sending shockwaves through economic channels and spooking both buyers and sellers.
Despite lower rates, the resulting financial trepidation has kept housing activity and demand muted, resulting in lowered or flat home prices in many Canadian centres this past year, especially in the higher-priced centres in BC and ON.
It remains to be seen whether Canada could still see a recession resulting from trade disruptions, which may continue to dissuade homebuyers.
Beyond that, enough sellers would need to list to maintain a balanced market (in the short term) in today's lower-interest-rate environment.
That depends on who you ask — and who is trying to sell their home, or refinance or renew their mortgage.
Home prices are seen through the eyes of the beholder. Many new buyers want prices to decrease so they can better afford a home, but homeowners don't want their homes to lose value relative to their mortgages for obvious equity-related reasons.
According to National Bank stats, mortgage affordability improved again in Q3 2025, with lower mortgage rates and home price declines easing the metrics for 7 of 10 Canadian centres:
BMO's economist, Robert Kavcic, recently spoke in The Globe and Mail about the positive direction he sees home affordability heading in Canada:
Use our great calculator below for an idea, then give us a shout for your numbers.
December 2025 — The three Canadian centres with the highest average MLS® home prices are:
Based on the MLS®HPI Composite Benchmark (not seasonally adjusted)
December 2025 — The six Canadian centres with the lowest average MLS® home price.
We're not saying you should (or could) move there, but you can dream about how much home you'd get for the price.
Based on the MLS®HPI Composite Benchmark (not seasonally adjusted)
BALANCED – The national SNLR (sales to new listing ratio) in December eased to 52.3% from 52.7% last month.
Despite decreased sales, new supply also dropped, bringing the national ratio further into balanced market territory. Compared to December 2024, all property listings were up 7.4%, but still below the long-term average for this time of year.
A few other details:
Why is the Canadian market balanced? Overall housing activity in 2025 was subdued due to economic uncertainty stemming from the U.S. trade war. Inventory levels were higher than the previous year, with sufficient demand (sales) to maintain a balanced national market heading into 2026.
Is there market disparity in Canada? Always. Regardless of national or even provincial sales and listing averages, Canada is a big country (area-wise), and home shoppers and sellers can find very different market conditions depending on where they're buying or selling.
According to CREA (Canadian Real Estate Association), a strong buyer's market is when the sales-to-new-listings ratio (SNLR) is 45% or below.
At that ratio percentage, there are typically more properties for sale than buyers, offering more choice and bargaining power — especially in placing purchase offers with conditions that protect a buyer's rights and finances.
When the SNLR falls between 45% and 65%, market conditions are considered 'balanced' in buyer demand, available listings, and sales levels. This state helps to keep prices relatively stable, allowing reasonable purchase and sale terms.
The middle ground of housing competition — balanced markets can lean more towards the buyer's or seller's spectrum. And despite any prevailing national or local trends, a particular house, street or area can defy it (you know who you are).
An SNLR of 65% or higher is a market that strongly favours the seller.
In a seller's market, there are more buyers than sellers, and the properties sell quickly and at higher prices, giving the seller more power to set their price and terms of sale.
When the demand for housing exceeds supply, buyers often resort to a gamut of strategies to snap up a house before others, such as engaging in bidding wars or feeling pressured to place no-condition offers.
This graphic offers a provincial snapshot of prices in Q4 2025 compared to 1 year, 3 years, and 5 years ago.
As you can see, home prices have increased in most provinces across Canada compared to 5 years ago, though some major centres have seen recent declines.
Want an even more interesting stat? The average Canadian MLS®HPI composite benchmark home price has risen more than 200% since 2005 (over 20 years)!
Here are a few multi-numbered sources to keep you busy and in the know:
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Continually updated. Where rates may go now and later — and what’s driving them.
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You have to be able to handle higher payments as a buffer for affordability.
