The Canada Mortgage and Housing Corp. (CMHC) projects that home prices may rebound to peak levels observed in early 2022 by next year, with potential to reach new heights by 2026. This forecast comes amidst a backdrop of increasing rental housing supply, which is still expected to lag behind demand.

Challenges and Prospects for Rental Housing

Despite more rental housing coming to the market, higher rents and lower vacancy rates are anticipated. Unfavorable financing conditions could hinder new rental projects in 2024, says CMHC's chief economist Bob Dugan.

Anticipated Rebound in Home Sales and Prices

Affordability remains a concern, yet declining mortgage rates and robust population growth are expected to drive a recovery in home sales and prices. Home sales have seen a significant drop from early 2021 to the end of 2023, with prices falling nearly 15% during the same period.

Regional Perspectives on Housing Starts

Nationally, housing starts are predicted to decrease this year but recover by 2025 and 2026. Ontario and B.C. are forecasted to lead this year's decline, while the Prairie provinces are expected to see an uptick due to more affordable home prices and a positive economic outlook. Quebec and the Atlantic region will experience varying levels of new home construction.