Forecasting home prices and market trends from 2025 to 2027.
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, the national housing market in September saw a decline in home sales, ending months of slight gains. Despite being the best September since 2021, sales activity remained below average and significantly below trend expectations for 2025.
New listings and average home prices also fell compared to last month.
The Bank of Canada has cut its policy rates by 0.50% this fall, with experts anticipating upward momentum in many local housing markets leading into year-end 2025 and spring 2026.
Next CREA update on November 15, 2025
$682,800 in September 2025 (a decline of 0.6% m/m from August's $686,800)
This statistic logged a decline of 3.4% year-over-year and was about 20% lower than the $851,600 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 $855,800)
Recent rate drops may help drive more housing activity than usual in the colder months ahead.
Many home buyers and sellers have been on the sidelines, waiting for some financial and economic clarity after Trump took a wrecking ball to the Canada–U.S. trade relationship.
Recent Bank of Canada rate drops, as well as any potential incentives offered in the upcoming federal budget (there's buzz of a GST reduction for first-time buyers), may sharpen the budget picture and offer motivation to buy or move, potentially heating housing markets this fall and winter as outdoor temperatures drop.
Housing market analysts and realtors are hoping for any bump to finish out 2025 better than it started — though continuing economic uncertainty is likely to keep a lid on a housing recovery in the 2nd half of the year.
Read on for what some housing experts are expecting this year and beyond.
“In short order, we’ve gone from a slam dunk rebound year to treading water at best.”
– Shaun Cathcart, CREA Senior Economist, quoted in the Financial Post, Apr. 15, 2025
Housing experts and economists have been concerned about the trajectory of Canada's housing market, but look to recent Bank of Canada interest rate cuts to help spur recovery.
Are housing forecasts for real, or are they 'Pin the Tail on the House Donkey' in predicting where home prices might go?
Housing experts can differ widely on what's happening with our housing markets. That's partly due to Canada's size, with regional differences often skewing the big 'housing landscape' picture (for example, Vancouver and Toronto's outsized and outlandish prices and housing demand). And, stat sources can differ, especially if using 'in-house' numbers.
At the end of 2025, we'll break out the sparklers and compare the predictions with the actual results (when they come in) to see who pinned it right.
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. 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 curbed immigration in 2024, and the temporary resident outflow reached over 660K. Increased tightening and outflow are expected to continue for 2025 and beyond.
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 increase the incentive to improve starts, which 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 seem to have less trouble getting shovels in the dirt — both these cities have recently reduced legislation to allow more multi-family buildings within established neighbourhoods, and have led national starts for months now.
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
Typically, lowering interest rates attracts buyers and stokes housing demand. But this time around, a brand new trade war with the U.S. is sending shockwaves through economic channels and spooking buyers. Despite lower rates, it has the potential to reduce demand compared to the original forecast for 2025.
However, home affordability is currently (still) at the all-time worst in Canada. Home prices are down only about 20% from the peak of 45% in March 2022, and rent and other prices are elevated, making it harder for homebuyers to save enough for a down payment.
Could demand abate enough to bring home prices down? It remains to be seen whether a potential recession resulting from trade disruptions would continue to dissuade homebuyers.
Beyond that, enough sellers would need to list to maintain a balanced market (in the short term) in a low-interest-rate environment.
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 sellers want them to stay higher for obvious equity reasons.
According to National Bank stats, mortgage affordability improved again in Q2 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.
September 2025 — The three Canadian centres with the highest average MLS® home prices are:
Based on the MLS®HPI Composite Benchmark (not seasonally adjusted)
September 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 September eased to 50.7% (from 51.2% last month).
New supply dropped, and sales decreased to reduce the national ratio, still in balanced market territory. Compared to September 2024, all property listings were up 7.5% and in line with the long-term average for this time of year.
A few other details:
Why is the Canadian market balanced? Overall housing activity in 2025 has been subdued so far due to economic uncertainty stemming from the U.S. trade war. Inventory levels are higher than last year, with sufficient demand (sales) to maintain a balanced national market heading into the fall.
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 Q2 2025 compared to 1 year, 3 years, and 5 years ago.
As you can see, home prices in most provinces across Canada have increased over the past 5 years — though BC and ON, considered the most expensive markets, 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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You have to be able to handle higher payments as a buffer for affordability.
