Canada’s spring housing market began to find its footing in May, with momentum carrying into June. According to the latest House Price Survey and Market Forecast from Royal Lepage, the average price of a home decreased 1.4 per cent year over year to $814,900 in the second quarter of 2026. On a quarter-over-quarter basis, however, the national aggregate home price remained flat, increasing a modest 0.2 per cent.
“After a sluggish first quarter, the spring housing market finally got rolling in May. Several regions are now seeing that uptick in momentum carry into summer, as buyers who held back earlier in the year re-enter the market,” said Phil Soper, president and CEO, Royal LePage. “In many cases, what has kept consumers on the sidelines is not a lack of interest, but a lack of urgency. In markets where inventory levels remain elevated, homebuyers have the luxury of time, browsing at their own pace until the right property comes along. That measured approach is reinforced by a persistent backdrop of economic uncertainty, which continues to shape how and when many Canadians decide to move.”
In May, Canada’s Consumer Price Index (CPI) rose 3.2 per cent year over year, up from 2.8 per cent in April, the highest reading since January 2024. Rising energy prices are primarily Bank of Canada Governor Tiff Macklem indicated in June, however, that inflationary pressures have not spread broadly in a way that would signal a wider rise in general inflation. The Bank of Canada’s key lending rate remains at 2.25 per cent, untouched since October 2025.
“Should rising inflation become more widespread, the Bank may be compelled to raise rates again,” said Soper. “What our regional experts tell us, however, is that a modest rate increase is unlikely to set off alarm bells. This is not the post-pandemic era, when steep and rapid rate surges sent shock waves through the market. Today’s buyers are thinking strategically, weighing broader risks to their employment and the economy, rather than reacting to incremental rate moves.”
On July 1, the United States declined to extend the Canada-United States-Mexico Agreement (CUSMA) for a new 16-year term, triggering a period of annual reviews that will run until the agreement’s scheduled expiry in 2036. While the agreement remains in force for now, the decision introduces a prolonged negotiating period. For businesses across the continent, that uncertainty is unlikely to ease anytime soon.
“For Canadian consumers, ambiguity surrounding CUSMA is another reason to pause and reassess before making major financial commitments, including the decision to buy or sell a home.” said Soper. “Even though most are not directly impacted through their employment, we know that trade-related anxiety is enough to weigh on consumer confidence.
“Still, we are optimistic that Canada’s strong economic foundation will keep the fall market on track. Pent-up demand from buyers and sellers who sat out earlier this year continues to build. The fundamental desire to own a home has not gone away – it has simply been deferred.”
Canadian mortgage holders are also approaching the end of a multi-year renewal cycle rooted. Over the next year, the last of the five-year, fixed-rate mortgages taken out during the pandemic will come up for renewal, representing approximately 12 per cent of all outstanding mortgages, according to the Bank of Canada. On average, these borrowers can expect their monthly payments to increase by 15 per cent.
“The over-blown pandemic mortgage renewal scare is all but over and most Canadians have weathered the storm,” said Soper. “By the middle of next year, virtually all borrowers facing significant payment increases will have renewed. While most will be able to manage the adjustment, a small subset of homeowners face a more challenging road, particularly in higher-priced markets where home prices have taken a more sustainable dip in recent years.
“That said, the numbers remain small enough that we do not expect a meaningful impact on the broader housing economy. National mortgage delinquency rates remain low by historical standards, meaning that most borrowers have been able to absorb higher payments without falling behind and have been able to successfully refinance. Rising incomes and a resilient labour market continue to work in homeowners’ favour. And, strict mortgage stress test rules mean borrowers would have qualified at a much higher rate than they actually paid when they took out those mortgages.”
