A housing market rebound in 2026 is unlikely based on the latest numbers released Thursday by the Canadian Real Estate Association (CREA), say economists.

“Expectations for a marked recovery in Canadian housing activity have been dialed back again,” Douglas Porter, chief economist at Bank of Montreal, said in a note.

April sales rose 0.7 per cent from the month before, but he said “no one is going to mistake that for a sign of spring for the chilly housing market,” given that sales remain four per cent below year-ago levels and 10 per cent off of the norm for this time of the year.

Prices are also down four per cent from a year ago and 20.5 per cent off the pandemic peak in February 2022.

“At this point in the year, the chance for a full-blown housing rebound has likely slipped away,” Clay Jarvis, who covers mortgages at NerdWallet Canada, said in a note.

Toronto-Dominion economist Rishi Sondhi was a little more optimistic about the CREA numbers since Ontario posted a “solid” sales gain of 4.3 per cent month over month and the average home price across Canada rose 2.6 per cent in April from March.

He said the slight drop in the sales-to-new-listings ratio “is well below the long-term average and signals modest price growth moving forward.”

TD is calling for an increase in prices and sales for the second quarter, but Sondhi said that won’t be enough to pull the market out of its overall slump.

“This will likely only partially retrace significant first-quarter weakness, leaving an overall subdued picture for the first half of the year,” he said.

Sondhi also said the once-hot housing market faces plenty of economic headwinds, including weak population growth, elevated supply in key markets and a “shaky” jobs picture.

But Porter said the current sales-to-new-listings ratio points to a further contraction in prices and indicates “little prospect for a quick turn anytime soon.”

He said further price decreases are needed to improve affordability, which remains far below historical norms despite recent price declines and a drop in interest rates.

On a provincial basis, Ontario and British Columbia, the country’s housing heavy hitters for prices and sales, had been the biggest drags on the overall market, but other “once-solid” regions are showing signs of cooling, the CREA report said.

For example, sales dropped by double digits in Edmonton, Winnipeg and Halifax, while previously “sizzling” Calgary posted a nearly 10 per cent drop in sales and a decline in its home price index.

“Given the lingering affordability issues in many regions of the country, and the now-distant prospect of any further rate cuts by the Bank of Canada, it’s tough to see the market springing to life anytime soon,” Porter said.

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Today’s Posthaste was written by Gigi Suhanic with additional reporting from Financial Post staff and Bloomberg.

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