National housing trends

CREA 2026 Sales Forecast

• For the calendar year 2026, CREA is forecasting that **national home sales will rise about 5.1% to roughly 494,512 transactions.

Regional Housing Market Highlights

Overall Regional Context

The national market ended 2025 and entered 2026 in a balanced but subdued state, with sales slightly lower than a year earlier and average prices broadly stabilizing rather than rising sharply. CREA’s December data shows the national sales-to-new-listings ratio near long-term norms, while inventories have lifted moderately. CREA expects a gradual uptick in 2026 activity led by provinces with more room to recover.

Major Metro & Provincial Highlights

Western Canada – Alberta, Saskatchewan, Manitoba

• Alberta markets (e.g., Calgary) are generally more affordable and resilient compared to the priciest markets (Toronto, Vancouver), and Calgary’s growth continues tied to population inflows and housing starts.
• Prairie provinces such as Saskatchewan show solid demand fundamentals, though not as high price growth as Québec, with more stable inventory levels.

Takeaway: Western markets have been steadier, benefiting from relatively lower prices and continued regional economic growth, supporting demand into early 2026.

Atlantic Canada – Nova Scotia, New Brunswick, PEI, Newfoundland & Labrador

• These markets often have smaller populations but have shown relative price strength during last year’s run, supported by increasing affordability and internal migration trends (ongoing through late 2025).
• Regional outlooks indicate continued balanced conditions into 2026, with potential for modest growth as spring market activity unfolds.

Takeaway: Atlantic regions remain relatively stable with less volatility than larger urban centers.

Key Themes in Regional Differences

Balanced & Transitional Market

Across most regions, housing conditions in January 2026 remain better described as balanced than strongly favoring buyers or sellers, with moderate inventory and measured buyer interest as the spring sales season approaches.

Regional Divergence Continues

• Québec’s Montreal stands out for stronger relative performance in price and annual sales trends.<
• Ontario’s large markets and BCshow more noticeable price moderation and slower sales recovery.
• Prairie and Atlantic marketsgenerally offer more stable conditions, with less pronounced swings.

Outlook References

CREA’s 2026 forecast emphasizes that British Columbia and Ontario — despite softer conditions — may lead the modest rebound in activity, while other provinces remain steady or grow at slower rates.

Mortgage Rate Trends

Bank of Canada Policy Rate

Bank of Canada (BoC) – January 28, 2026 Decision

• The BoC held its target overnight rate at 2.25% in its first rate decision of 2026, marking the second consecutive hold at this level. Policy makers stated that this rate is appropriate given moderate economic growth and inflation near the 2% target.

• The prime lending rate — which many variable mortgage rates track — remains at ~4.45% following the BoC decision.

What this means: The policy rate is expected to remain stable through much of 2026, based on current market pricing and bank forecasts unless major economic shocks occur.

Current Mortgage Rates (January 2026)

Fixed Mortgage Rates

• 5-Year Fixed: Best available offers in Canada are approximately 3.84 — 3.99% (varies by lender and credit profile).
• 5-Year Variable: Top variable rate offers are around ~3.35–3.55% as of late January.

How to interpret:

• Fixed rates are higher than variable rates because they’re influenced by long-term bond yields as well as lender risk spreads — not solely the BoC policy rate.
• Variable rates are more directly tied to prime, so they remain lower when the BoC holds its rate.

Bond Yields & Their Influence

5-Year Government of Canada Bond Yield (Late Jan 2026)

• The 5-year Government of Canada bond yield was about ~2.94%near the end of January 2026.

Why this matters: Fixed mortgage rates often move with the 5-year bond yield plus a spread — meaning if bond yields stay elevated, fixed mortgage rates tend to stay elevated too.

Near-Term Outlook & Forecast

Policy Rate Expectations (2026)

• Economists and market-based forecasts largely expect the BoC policy rate to remain at 2.25% through much of 2026, with limited probability of additional cuts in the near term unless growth or inflation unexpectedly cools.
• Some forecasts even incorporate a possible modest increase late in 2026, depending on inflation and external economic factors — though this is not consensus.

Mortgage Rate Forecasts

• Fixed mortgage rates may fluctuate with long-term bond yield movements rather than Bank rate changes — so they could trend modestly higher if bond yields rise.
• Variable rates are expected to stay relatively stable if the BoC keeps the overnight rate unchanged.

Economic Indicators

GDP Growth (Economic Activity)

Modest Growth Expected in 2026

• The Bank of Canada’s January 2026 Monetary Policy Report projects modest economic growth, with real GDP expected to increase by about 1.1% in 2026 after somewhat volatile patterns in the second half of 2025. Growth in 2027 is forecast around 1.5%
• Independent forecasts also anticipate real GDP growth near ~1.6% for 2026, supported by resilient consumer spending, improving labour conditions, and policy support.

Inflation (Price Levels & Pressures)

Inflation Near Target

• The Bank of Canada’s outlook for January indicates inflation remaining close to the 2% target over the projection horizon, as excess supply and other factors keep price pressures anchored despite global trade disruption.
• Cooling core inflation metrics reported at the end of 2025 suggest persistent but moderate inflation, which influenced the BoC to hold rates in January 2026at 2.25%.

Housing Inventory (Supply Conditions)

Inventory Trends as of Late 2025 / Entering 2026

• The national MLS® housing inventory stood at 133,495 active listings at the end of December 2025, which is up ~7.4% year-over-year but below long-term seasonal averages — reflecting tightened supply heading into early 2026.
• The sales-to-new-listings ratio (SNLR)hovered around 52.3% in December, consistent with balanced market conditions (a ratio between ~45–65%)./li>
• While inventory had been climbing earlier in 2025, the late-year reduction in new listings ahead of the January market suggests some tightening as sellers pulled listings seasonally, potentially supporting price stabilization.

Bond & Mortgage Market Rates

 5-Year Government Bond Yields

• Yields have largely traded in a stable range near ~2.9–3.0% from mid-2025 through January 2026.
• Market expectations anticipate this yield may remain near ~2.8–3.1% through 2026, depending on economic data and central bank policy.

 5-Year Mortgage Rate Trends

• 5-Year fixed mortgage rates have generally trended upward through 2025and into early 2026 as bond yields firmed and lender spreads adjusted, with national averages around 4.7%by January 2026.
• Strong bond markets and economic signals led lenders to hike posted fixed rates after earlier lows in 2025.

How to Use These Metrics

• For homebuyers and refinancers, the gap between the 5-yr GoC yieldand 5-yr fixed mortgage rates reflects borrowing costs — higher yields typically lead tohigher fixed mortgage pricing.

Mortgage rate forecasts suggest stability through 2026, with fixed rates staying elevated relative to mid-2024 levels and variable rates remaining tied to the BoC’s policy rate.