Home sales in the first half of the year were much slower than our first half (H1) forecast had anticipated.

While it’s difficult to pin the blame entirely on the economic uncertainty arising from the tariff-related policies of the new US administration, it’s also difficult to say these developments have had no effect either.

And despite home prices having eased since the start of the year, in addition to three Bank of Canada interest rate cuts, buyers have remained hesitant to re-enter the market.

Our H2 forecast takes stock of these dynamics and presents a revised outlook for the second half of the year.

Key highlights

Home sales have lagged well below seasonal and long-term averages for most of the first half of the year, while resale inventory has climbed to highs not seen in over a decade.
Home prices have trended down modestly since the start of the year, and the Bank of Canada has cut the policy three times since the start of the year. This has materially improved affordability in the market, but not sufficiently to encourage many buyers sitting on the sidelines back into the market.
A further cut to the policy rate is expected by the Bank of Canada by year end, but the current trajectory of sales is unlikely to be able to make up the ground lost in the first half of the year, by year-end.