The Canada Mortgage and Housing Corporation (CMHC) released its summer update to the 2026 Housing Market Outlook last week. The report paints a relatively bleak picture of Canada’s housing market in 2026 amid ongoing trade and geopolitical tensions, which are weighing on Canadian consumer confidence and financial strength. Here’s what it means for the market ahead.

• CMHC expects home sales and prices to soften. CMHC projects home sales to fall to about 457,000 units in 2026, down from 470,300 last year, while the average resale price is forecast to dip slightly to roughly $675,000.
• New construction is slowing, too. Housing starts are projected to drop to about 241,400 in 2026 from 259,000 in 2025, with the pullback most visible in Ontario and British Columbia’s condominium markets.
• The regional picture is uneven. CMHC expects Western Canada to lead growth, helped by stronger commodity prices tied to the U.S.-Iran war, while Ontario and British Columbia may continue to struggle with affordability and slower population growth.
• CMHC believes trade and geopolitical risks cloud the outlook. The housing organization flagged the U.S.-Canada trade war and the resumed Middle East conflict as key downside risks that could keep borrowing costs elevated and demand soft for longer.

CMHC’s message is largely unchanged from its winter forecast, which is it doesn’t expect a quick rebound. With economic growth projected at just 0.7% this year, according to the CMHC, and five-year mortgage rates hovering near 5.20%, affordability is improving only gradually. A more meaningful recovery in sales, prices and construction isn’t expected until 2027 and 2028, assuming trade tensions ease.

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.