Canada's housing market has been showing small signs of recovery in 2026, but affordability is still a real problem for many Canadians. Whether you’re buying, selling or an agent supporting your clients, the mixed signals in the headlines probably aren't helping.

Six months into 2026, we’re starting to see some optimism return to the housing market. As of June 2026, activity started picking up in some of Canada’s biggest housing markets like Ontario, where June sales rose 5.5 per cent year-over-year.

B.C. saw slower growth at 0.9 per cent YoY, but given it’s the first time sales increased since September 2025, it’s welcome progress. Smaller markets, like Manitoba, have remained somewhat stable: provincial home sales ticked up one per cent from last year in June, even as more homes came onto the market.

Karim Kennedy, Coldwell Banker Canada’s CEO, says that buyers are “gaining more confidence that the market is finding its footing,” giving hope to buyers once again. But while the market is showing signs of improvement, affordability remains a major challenge for many Canadians. This is especially true for homeowners coming up for mortgage renewals after locking in much lower rates during the pandemic.

A lot has happened over the past six months. While it’s impossible to predict the future of the housing market, here are five things we’ve learned from the last year that can help you stay informed when making decisions, whatever side of the market you’re on.

Lower rates help, but they don't fix affordability

After years of rising borrowing costs, interest rates have finally lowered a bit and stayed stable, and monthly payments are becoming more manageable than they were. However, home prices still remain high; the national average sat at $696,078 in June 2026.

And, just because you qualify for a larger mortgage doesn't necessarily mean you'll feel comfortable carrying it. In Toronto, one of the most expensive housing markets in the country, there’s a renewal wave making its way through the system; the last of the pandemic-era five-year fixed mortgages, when housing and interest rates were low, come up for renewal over the next year.

The Bank of Canada estimates about nine per cent of Toronto-area borrowers renewing in 2027 could struggle to refinance at current home prices, compared to four per cent nationally.

For 2026 and the year ahead, lower rates could slowly bring more buyers back into the market, but high home prices and a wave of mortgage renewals will likely keep affordability a challenge for many households.

For buyers, that means stress-testing your own budget beyond what a lender will greenlight. For sellers, it means recognizing that a rate cut won't necessarily bring a flood of confident buyers to your door. And for agents, it's a reminder that the most valuable guidance right now isn't about timing the market, it's about helping clients understand what financial burden they can carry comfortably, over the long term.

Why your local market changes everything

Nationally, housing supply has moved much closer to balanced market conditions, while Ontario finished June with 4.2 months of inventory — down from 4.7 months a year earlier, and well above its long-term average of 2.7 months. Buyers are starting to have more choice, giving them the flexibility to take their time rather than rush into the first available opportunity.

Even so, the numbers vary depending on where you're looking in Canada. Parts of B.C. have seen prices go down, while in Toronto, condos have become more affordable than they were a few years ago.

There isn't one Canadian housing market; there are dozens of local markets across the country, each moving at its own pace in very different ways. Before making decisions, look at what's happening in the neighbourhoods you're actually considering. Pay attention to inventory, average days on market, and what homes are actually selling for, not just what they're listed at.

Those are the numbers that will ultimately help paint the clearest picture, and help you plan even in uncertain market conditions. 

The real barrier to housing is bigger than just the mortgage rate 

For many first-time buyers, getting approved for a mortgage isn't the hardest part anymore; saving enough for a down payment is. It now takes an average homebuyer 4.4 years to save a down payment, up from 3.4 years just a year earlier. For first-time home buyers specifically, that reached 4.7 years.

Between the high cost of rent, everyday living expenses, and rising costs in the economy (seven in 10 Ontarians aged 35-54 said gas prices were affecting their day-to-day activities, for example), getting to that starting line can feel like the biggest obstacle of all.

If you're planning to buy, it's worth looking into every program available before you start house hunting. Even though some of them take time to set up, something like an FHSA allows eligible buyers to save up to $40,000 tax-free, while the Home Buyers' Plan lets you withdraw up to $60,000 from your RRSP.

One thing we’ve learned over the past year is that trying to time the market perfectly isn’t really the most realistic move anymore. It makes more sense to focus on being financially stable and ready, no matter what conditions look like when you’re ready to buy.

If home ownership still feels out of reach after looking at all your options, giving yourself more time to save is the most realistic move you can make.

Confidence remains a missing piece in the housing market

More inventory, slower price growth, and somewhat lower interest rates have given buyers more choice and negotiating power, but that hasn’t necessarily turned into confidence.

With incomes still under pressure from the cost of living and plenty of uncertainty about where the market is headed, many would-be buyers are still sitting on the sidelines, waiting to see what happens next before committing to one of the biggest financial decisions of their lives.

This is playing out on the ground. In Ownright's Operators Report, 40 per cent of real estate professionals pointed to broader economic uncertainty — like recession fears — as the biggest driver of buyer hesitation, well ahead of interest rates at 15 per cent.

The thing holding buyers back often is how the future feels. For buyers, sellers and the agents guiding them, the lesson is the same: this is the biggest financial decision most people will ever make, and right now they're making it on how the market feels as much as what the numbers say.

Until buyers feel genuinely secure about prices, renewals and what comes next, that hesitation will keep shaping the market more than any rate cut.

The second half of 2026: slow progress, not a sudden turnaround

Don’t expect a dramatic rebound. The data so far point to a market that is slowly finding its footing, rather than one heading for a sudden turnaround. The numbers above suggest the second half of 2026 could bring more movement but not a full return to the markets.

Interest rates, job stability, wage growth and consumer confidence will remain the biggest factors impacting activity through the rest of the year. Canada’s unemployment rate was 6.5 per cent in June, while Ontario was seven per cent, and the Bank of Canada says businesses remain cautious about hiring.

Even a small change in any of those four could be enough to nudge hesitant buyers into making a move.

The question isn’t whether Canadians still want to buy homes, it’s whether enough of them will feel confident enough to act before the year is over. In a market where there’s no one-size-fits-all answer, job security, income, savings, mortgage costs and local conditions will all play a role in determining who feels ready to move.

For real estate agents, the opportunity is to meet clients where they are, requiring a more personalized approach than ever.