CMHC Just Cut Its Housing Forecast — What It Means If You're Buying, Selling, or Renewing
Published July 28, 2026
Canada Mortgage and Housing Corporation quietly downgraded its outlook for the rest of 2026 last week, and the new numbers are worth a look no matter which side of the housing market you're standing on. The federal housing agency's Summer 2026 update now calls for slower growth, softer home prices, fewer new builds and continued easing in rental markets right through the end of the year — with a split that leaves Ontario and B.C. looking a lot different from the Prairies and Quebec.
Here's what's actually in the update, and what it means for your specific situation.
What CMHC changed
The agency's baseline call for 2026 is a Canadian economy growing at just 0.7%, with high borrowing costs, weak population growth and cautious buyers keeping a lid on demand even as affordability has technically improved. The practical result, nationally:
- Housing starts are expected to fall to about 241,400 units this year, down from 259,028 in 2025
- Resale activity is projected at roughly 457,200 MLS® sales, down slightly from 470,314 last year
- The national average resale price is forecast to dip modestly to about $675,200
- The average five-year fixed mortgage rate is expected to hold near 5.2% for the rest of the year
CMHC's own downside scenario — the one it says could play out if the U.S.-Iran conflict pushes oil prices higher again or trade tensions with the U.S. intensify further — is even softer: fewer starts, weaker sales, and prices holding closer to flat than even this new baseline suggests.
The regional split that matters most
The national numbers hide a much sharper story underneath. CMHC expects the Prairies and Quebec to keep seeing relatively steady demand and modest price gains, while British Columbia and Ontario continue to struggle with weak sales, tied to affordability and slower population growth.
The Toronto-specific numbers make the point clearly. CMHC's forecast has the average Toronto resale price easing to roughly $1,020,000 in 2026, down from $1,067,846 in 2025 — even as sales tick up slightly to about 63,500. Ottawa's average price is forecast to soften to roughly $693,000, down from $709,111. Compare that with Calgary, where the average price is expected to hold essentially flat at around $650,000, or Saskatoon, where prices are forecast to keep climbing toward $441,500.
| Market | 2025 avg. price | 2026 forecast | Direction |
|---|---|---|---|
| Toronto | $1,067,846 | ~$1,020,000 | ▼ down |
| Ottawa | $709,111 | ~$693,000 | ▼ down |
| Calgary | $644,091 | ~$650,000 | ▲ up |
| Saskatoon | $418,034 | ~$441,500 | ▲ up |
| Montréal | $651,873 | ~$675,400 | ▲ up |
Source: CMHC Summer 2026 Housing Market Outlook, baseline forecast, published July 22, 2026.
Rental markets are still easing — but unevenly
The other half of the update is about renters and landlords. CMHC expects national rental markets to keep loosening in 2026 as new purpose-built rental supply comes online, which should push vacancy rates up and slow asking-rent growth. That easing is most visible in Toronto and Vancouver, where vacancy is forecast to climb (Toronto's rate is expected to rise to about 3.8% from 3.0% in 2025) while average two-bedroom asking rents still creep higher, to roughly $2,120 from $2,046. Prairie markets are the exception — Calgary's vacancy rate is forecast to climb even further, toward 5.9%, as new supply outpaces demand there too.
What this means for you, by situation
If you're a first-time buyer: Slower price growth in Ontario and B.C. buys you time, but CMHC isn't forecasting a big affordability breakthrough — mortgage rates are only expected to ease marginally and are forecast to actually creep back up in 2027 and 2028. Waiting for a much bigger price drop may mean waiting for rates to rise instead.
If you're selling: In Toronto, Ottawa, or most of Ontario and B.C., this forecast argues for pricing realistically now rather than banking on a rebound later in the year — CMHC doesn't see meaningful price recovery in these regions until 2027 at the earliest.
If you're renewing a mortgage: The forecast's 5.2% average five-year fixed rate for 2026 lines up with what you're likely already seeing from lenders. If your renewal is coming up, this is a reasonable planning number, though it's worth shopping multiple lenders given how much day-to-day rates have been moving with global oil and trade headlines this summer.
If you're a renter: Easing conditions in Toronto and Vancouver are a genuine, if modest, silver lining — more supply and softer demand typically mean more negotiating room at renewal, especially compared to the tighter markets of the past few years.
If you're a landlord: Build the vacancy-rate trend into your 2026-27 planning, particularly if your properties are in the higher-supply condo segment of the Toronto or Ottawa markets.
The bottom line
CMHC's message is essentially: don't expect a dramatic move in either direction. Prices should drift lower in the softer markets through the end of 2026 before a gradual, modest recovery starts in 2027, while the Prairies and Quebec keep chugging along largely unaffected. The bigger wildcard, by CMHC's own admission, isn't the housing market itself — it's whether the U.S.-Iran conflict and the ongoing Canada-U.S. trade dispute keep pushing costs and uncertainty higher through the rest of the year.
Figures in this article are drawn from CMHC's Summer 2026 Housing Market Outlook, published July 22, 2026, and reflect the agency's baseline forecast unless otherwise noted.
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