Spring Stall: CREA Slashes the 2026 Forecast, Fixed Rates Cross 4%,
and All Eyes Are on April 29

Peter Kiriazopoulos, REALTOR®  |  Kompass Realty Group  |  April 19, 2026

If you were expecting a classic spring rebound this year, this week handed you a reality check. On April 16th, CREA — Canada's national real estate association — quietly but significantly downgraded its 2026 housing forecast. The culprit? A combination of trade war uncertainty, an oil-price spike driving bond yields higher, and a buyer pool that's still sitting on its hands. National home prices have now fallen for 14 consecutive months and are sitting 20% below the early-2022 peak.

And while the Bank of Canada has held its policy rate at 2.25% since last fall, it hasn’t done much to help fixed-rate mortgage holders. The five-year fixed rate has quietly crossed the 4% mark at most broker channels — up roughly 25 to 50 basis points since February — driven entirely by bond market moves, not BoC decisions. With the April 29 Monetary Policy Report looming, this is a pivotal week for anyone buying, selling, or renewing. Let’s break it all down.

1. CREA Just Killed the Spring Rally Narrative — Here’s What Their Revised Forecast Actually Means

On April 16th, the Canadian Real Estate Association released a revised national forecast that caught many off guard. CREA now projects just 474,972 home sales across Canada in 2026 — barely 1% growth over 2025, down sharply from January’s forecast of 5.1% growth. The national average sale price was trimmed to $688,955, roughly $10,000 below what they projected at the start of the year. Ontario and B.C. are both forecast for virtually zero price growth.

What triggered the revision? A spike in oil prices pushed inflation expectations up, drove bond yields higher, and made fixed mortgage rates more expensive — just as spring buying season was supposed to kick off. CREA Senior Economist Shaun Cathcart put it plainly: higher mortgage rates and “the perception of temporality” may keep would-be buyers away during the peak spring months. Translation: buyers aren’t sure if this is a real window or just a brief lull, so many are still waiting.

For the GTA specifically, this tracks with what we’re seeing on the ground. Oxford Economics is projecting that prices will “drift lower before finding a bottom around mid-year.” Royal LePage CEO Phil Soper added a glimmer of hope: “Good news in geopolitical areas could lead to rapid market behavior change.” In other words, if the US-Canada trade situation improves, markets could move fast — but we’re not there yet.

Source: CREA, April 16, 2026; BNN Bloomberg

2. Fixed Rates Just Hit 4% — And the BoC Didn’t Do It

Here’s the story catching a lot of buyers off guard right now: the five-year fixed mortgage rate has quietly climbed to approximately 4.04% at broker channels and 4.29% at major banks. That’s a jump of 25 to 50 basis points since February — and the Bank of Canada hasn’t moved its overnight rate once. It’s been parked at 2.25% since last fall. So what’s driving it?

The bond market. Government of Canada five-year bond yields have crossed 3% for the first time since mid-2024, pushed up by a geopolitical risk premium: rising oil prices, global tension, and ongoing uncertainty around the Canada-US trade relationship heading into the July CUSMA review. Fixed mortgage rates track those bond yields — not the BoC overnight rate — so you can have a BoC hold and still see fixed rates tick up. That’s exactly what’s happening.

The practical impact is real. The OSFI stress test qualifying rate is now approximately 6.04% (contract rate plus 2%). On a $1.1 million home in York Region with 20% down, that qualifying bar meaningfully affects how much you can borrow. And for the roughly 1 million Canadians renewing their mortgages in 2026 — many of whom locked in at 1.5–1.8% in 2021 — this is not an abstract concern. A homeowner who locked in at 1.79% on a $520K mortgage five years ago is now facing roughly $589 more per month at current renewal rates.

Sources: Bank of Canada; bankofcanadaodds.com; Pegasus Lending; Globe and Mail, April 2026

The April 29 Bank of Canada announcement takes on extra weight this week. It includes the full Monetary Policy Report — the BoC’s most detailed communication, published only four times a year. Markets are pricing a 94–96% probability of no change to the overnight rate, but what everyone will be reading closely is the BoC’s updated language on tariff and inflation risk. If the Bank signals rate cuts ahead, bond yields could ease and fixed rates could pull back. If you’re pre-approved and your deal closes within 90–120 days, lock in a rate hold now.

3. TRREB March Data: A Fragile Green Shoot in a Two-Speed Market

Last week’s TRREB March 2026 numbers gave us the first year-over-year sales increase since September 2025 — 5,039 transactions, up 1.7% from March 2025. That matters. But the benchmark price at $941,800 (down 7.4% year-over-year) and 75% of GTA neighbourhoods still selling below asking tells the real story: this is a market cautiously nibbling, not recovering.

John Pasalis at Move Smartly flagged the most useful local insight: the GTA is not one market. The City of Toronto’s low-rise segment sits at just 3.5 months of inventory — relatively tight. York Region, Peel, and Durham are sitting above 5 months — firmly buyer’s market territory. In Stouffville and the broader York Region corridor, detached freehold homes are moving when priced right, but the inventory overhang is real and buyers know it. Markham’s average is around $1,167,000 with 26 days on market. Well-priced product moves; aspirationally priced product sits.

Source: TRREB Market Watch, April 7, 2026

4. The HST Holiday Is Live — $130K in Savings, One Year Only

If you’re considering new construction anywhere in the GTA, the most important thing that happened recently is now active: on April 1, 2026, the full 13% HST was removed on new homes under $1 million, with a stepped rebate applying up to $1.85 million. The maximum saving is $130,000. The window runs through March 31, 2027 — and Ontario Finance Minister Bethlenfalvy has been explicit: this will not be extended. It’s a one-year sale.

For a York Region buyer looking at a $1.1 million new townhome in Stouffville, Markham, or East Gwillimbury, those HST savings alone can close the gap that made renting feel more rational just two months ago. To qualify: purchase agreement with a builder signed between April 1, 2026 and March 31, 2027; construction must begin by December 31, 2028 and be substantially completed by December 31, 2031.

The macro backdrop explains why this was needed. CMHC’s March 2026 report showed Canada’s housing starts trend fell 2.9% — and even though GTA starts were up 23% year-over-year, the breakdown tells the story: 19,200 multi-unit/condo starts versus just 2,500 single-detached. The missing middle — freehold townhomes, semis, stacked towns — remains drastically undersupplied in the 905. The HST holiday is designed to bridge that gap. Builders are marketing it aggressively. The urgency is real.

The Bottom Line

For Buyers:  You’re still in a strong position across most of the 905. GTA benchmark prices are at five-year lows, 75% of homes sell below asking, and the HST holiday is live for new construction. The headwind is fixed rates crossing 4% — get pre-approved now, lock in a rate hold, and watch April 29 closely. If you’re considering new construction in Stouffville, Markham, or East Gwillimbury, the HST savings are real and the one-year deadline creates genuine urgency that wasn’t there two months ago.

For Sellers:  CREA is projecting 1% sales growth nationally. Prices are down 6–7% year-over-year in most GTA regions. Three quarters of neighbourhoods are selling below asking. The sellers getting deals done are priced at today’s market — not 2022 values. Turnkey freehold homes near transit in the 905 corridor are still moving for motivated, well-priced sellers. If you need to move in 2026, price sharply and go now — spring is your best window before the summer slowdown.

For Investors:  The condo correction is deep and ongoing — down 9% year-over-year and nearly 30% from the 2022 peak. Our assessment that we’re halfway through the correction still stands. Near-term cash flow remains under pressure with rents softening and vacancy rising. Patient capital with a 5+ year horizon has a compelling entry point — the construction collapse happening now is building a supply shortage for 2028 onward. But speculative short-term plays remain risky.

About Peter Kiriazopoulos

Peter Kiriazopoulos is a REALTOR® with Kompass Realty Group At RE/MAX Ultimate Realty, specializing in residential real estate across Stouffville, Markham, Richmond Hill, Aurora, Toronto, and the broader York Region and GTA. With deep local roots and a data-driven, client-first approach, Peter helps buyers, sellers, and investors navigate one of Canada’s most complex real estate markets. For a personalized market assessment, visit kompassrealtygroup.ca or reach out directly.

Sources

·       CREA — Downgraded Resale Housing Market Forecast, April 16, 2026: https://www.crea.ca/media-hub/news/crea-downgrades-resale-housing-market-forecast-amid-tariff-uncertainty-and-economic-uncertainty-3/

·       BNN Bloomberg — CREA lowers home sales forecast for 2026 amid shaky economic start, April 16, 2026: https://www.bnnbloomberg.ca/business/real-estate/2026/04/16/crea-lowers-home-sales-forecast-for-2026-amid-shaky-economic-start-to-year/

·       Bank of Canada — Policy Rate 2.25%, March 18, 2026: https://www.bankofcanada.ca/2026/03/fad-press-release-2026-03-18/

·       Bank of Canada — April 29, 2026 MPR announcement page: https://www.bankofcanada.ca/2026/04/interest-rate-announcement-and-monetary-policy-report-april-29-2026/

·       Capital Economics — Canada Housing Watch, April 16, 2026: https://www.capitaleconomics.com/publications/canada-economics-update/canada-housing-watch-apr-2026

·       Pegasus Lending — 5-year Fixed Mortgage Rates Canada, April 2026: https://pegasuslending.com/blog/5-year-fixed-mortgage-rates-canada-april-2026/

·       TRREB Market Watch — GTA Homes Sales Up and Selling Prices Down in March, April 7, 2026: https://trreb.ca/gta-homes-sales-up-and-selling-prices-down-in-march/

·       BNN Bloomberg — GTA Home Sales Up in March, April 7, 2026: https://www.bnnbloomberg.ca/business/real-estate/2026/04/07/home-sales-up-in-the-greater-toronto-area-selling-price-down-trreb/

·       CBC — GTA home sales up year-over-year for 1st time in 6 months, April 7, 2026: https://www.cbc.ca/news/canada/toronto/greater-toronto-home-sales-up-9.7154454

·       Move Smartly / John Pasalis — Toronto Housing Market in April, 2026: https://www.movesmartly.com/articles/toronto-housing-market-in-april-why-the-city-is-holding-up-while-the-suburbs-slide

·       Ontario Government — HST Rebate on New Homes (April 1–March 31, 2027): https://news.ontario.ca/en/release/1007212/ontario-expanding-hst-rebate-to-lower-the-cost-of-new-homes-in-partnership-with-the-federal-government

·       CBC — Ontario removing HST on new homes for one year: https://www.cbc.ca/news/canada/toronto/ontario-remove-hst-new-homes-9.7141269

·       CMHC — Housing Starts Report, March 2026: https://www.cmhc-schl.gc.ca/media-newsroom/news-releases/2026/housing-starts-march-2026

·       BNN Bloomberg / Phil Soper (Royal LePage) — April 16, 2026: https://www.bnnbloomberg.ca/business/real-estate/2026/04/16/crea-lowers-home-sales-forecast-for-2026-amid-shaky-economic-start-to-year/