Key Takeaways
- • RE/MAX Canada projects national home sales will rise 3.4% in 2026 after a prolonged market contraction, signaling early stabilization following a bruising 2025 period marked by falling prices and rising inventory.
- • Average home prices are expected to decline a further 3.7% in 2026, but this price softening is beginning to attract cautious buyers; a Leger survey finds 10% of respondents plan to purchase within 12 months, with half being first-time homebuyers.
- • Survey data reveals 23% of respondents would accelerate purchase plans if Bank of Canada interest rates declined by an additional 0.5–1%, positioning rate cuts and price declines as dual catalysts for market recovery among price-sensitive households.
- • First-time buyers aged 18–34 demonstrate the strongest near-term purchase intent, with 17% of overall survey respondents indicating homeownership plans at some point; this cohort is actively employing creative savings strategies to overcome affordability barriers.
- • Rising listings and extended time-on-market conditions are creating improved negotiation leverage for buyers, breaking years of seller dominance and establishing more balanced market conditions heading into 2026.
Summary
Canada's housing market is showing tentative signs of recovery as confidence gradually returns following a severe downturn in 2025. According to RE/MAX Canada's 2026 Housing Market Outlook, the market has stabilized after being "stuck in reverse," with the firm projecting a 3.4% increase in national home sales next year despite continued price adjustments. This represents a meaningful inflection point for a sector that has endured sustained headwinds from elevated interest rates, reduced purchasing power, and inventory overhangs.
The recovery narrative is underpinned by two complementary dynamics: falling prices and rising listings. Average home values declined across many Canadian regions throughout 2025, with RE/MAX anticipating a further 3.7% price decline in 2026. Counterintuitively, this price softening is attracting previously sidelined buyers back to market. A Leger survey commissioned by RE/MAX Canada reveals that 10% of poll participants plan to purchase a home within the next 12 months, with notably half of this cohort consisting of first-time buyers—a critical demographic segment that has been largely priced out of the market during the previous expansion cycle. Additionally, one quarter of survey respondents now believe their local markets will become more affordable in 2026, marking a sharp departure from years of sustained price escalation expectations.
Interest rate trajectory emerges as a significant variable in the recovery equation. Survey data indicates that 23% of respondents would be positioned to enter the market if the Bank of Canada reduced rates by an additional 0.5–1%, underscoring the sensitivity of Canadian household demand to incremental changes in borrowing costs. Don Kottick, President of RE/MAX Canada, attributes market resilience to fundamental homeownership interest persisting "amid looming economic clouds," noting that first-time buyers are "finding creative ways to save and enter the market."
Demographic distribution of purchase intent reveals concentrated interest among younger households. The 18–34 age cohort—particularly those with children—demonstrates the strongest purchase inclination, with 17% of overall survey respondents indicating homeownership plans at some point in their trajectory. This suggests that generational demand factors remain intact despite near-term affordability constraints, positioning 2026 as a potential inflection year for market clearing at lower price levels and elevated transaction volumes.
The recovery narrative is underpinned by two complementary dynamics: falling prices and rising listings. Average home values declined across many Canadian regions throughout 2025, with RE/MAX anticipating a further 3.7% price decline in 2026. Counterintuitively, this price softening is attracting previously sidelined buyers back to market. A Leger survey commissioned by RE/MAX Canada reveals that 10% of poll participants plan to purchase a home within the next 12 months, with notably half of this cohort consisting of first-time buyers—a critical demographic segment that has been largely priced out of the market during the previous expansion cycle. Additionally, one quarter of survey respondents now believe their local markets will become more affordable in 2026, marking a sharp departure from years of sustained price escalation expectations.
Interest rate trajectory emerges as a significant variable in the recovery equation. Survey data indicates that 23% of respondents would be positioned to enter the market if the Bank of Canada reduced rates by an additional 0.5–1%, underscoring the sensitivity of Canadian household demand to incremental changes in borrowing costs. Don Kottick, President of RE/MAX Canada, attributes market resilience to fundamental homeownership interest persisting "amid looming economic clouds," noting that first-time buyers are "finding creative ways to save and enter the market."
Demographic distribution of purchase intent reveals concentrated interest among younger households. The 18–34 age cohort—particularly those with children—demonstrates the strongest purchase inclination, with 17% of overall survey respondents indicating homeownership plans at some point in their trajectory. This suggests that generational demand factors remain intact despite near-term affordability constraints, positioning 2026 as a potential inflection year for market clearing at lower price levels and elevated transaction volumes.
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