TD Economics March 26 Revision: 2026 Housing Forecast Downgraded

TD Economics March 26 Forecast Revision

This analysis is part of our 2026 Canada Housing Weekly | TD Slashes Annual Forecast, CREA Data Shows Market Split weekly report series.

TD Economics has significantly revised its 2026 Canadian housing market forecast, downgrading national price growth expectations from 3.2% to 1.8% in its March 26 update.

Key Changes

• Price Growth: 3.2% → 1.8% (1.4 percentage point reduction)
• Sales Volume: 4.5% → 2.1% growth expected
• Recovery Timeline: Mid-2026 → Late 2026/Early 2027

Primary Factors

1. Affordability Constraints: Persistent challenges despite some rate moderation
2. Economic Growth Concerns: Revised GDP projections showing slower growth
3. Regional Weakness Spreading: Market softness becoming more broad-based
4. Policy Uncertainty: Hesitation among market participants

Regional Implications

Most Affected: Toronto, Vancouver, Ottawa
More Resilient: Calgary, Montreal, Atlantic Canada

Conclusion

TD’s revised forecast suggests a slower and more uneven housing market recovery in 2026. Market participants should focus on local market analysis and realistic timeline expectations.

Analysis based on TD Economics report released March 26, 2026.

Related Analysis

• 2026 Market Splitting: Why Ontario is Suffering While Calgary and Montreal Hold Firm
• Decoding CREA’s March 17 Report: Why 5 Months of Inventory Isn’t Moving the Needle

TD Economics March 26 Revision: Detailed Forecast Analysis

TD Economics' March 26 revision represents a significant shift in the bank's outlook for Canada's housing market in 2026. The downgrade reflects several key factors that have emerged since their December 2025 forecast.

Detailed Forecast Numbers

Regional Breakdown

The revision isn't uniform across Canada. TD identifies significant regional disparities:

• Ontario (GTA): Most affected, downgraded from +4.0% to +0.5% to +1.5%
• British Columbia: Moderate impact, revised from +3.0% to +1.0% to +2.0%
• Alberta (Calgary): Least affected, maintaining +5.0% to +6.0% growth
• Quebec (Montreal): Slight downgrade from +3.5% to +2.0% to +3.0%

Why TD Downgraded: Key Factors

1. Higher-for-Longer Interest Rates

The Bank of Canada's March 18 decision to hold rates at 5.0% signaled that elevated rates will persist through 2026. This changes affordability calculations and reduces purchasing power.

2. Economic Fundamentals Weakening

TD cites slowing job growth, elevated household debt, and business investment caution as contributing factors to the downgrade.

3. The 2021 Renewal Wave

Approximately 350,000 households who secured mortgages at sub-2% rates in 2021 will face renewal in 2026-2027, with average payment increases of $1,200+ per month.

Strategic Implications

For Homebuyers

1. Reset price expectations - don't assume 2025's modest gains will continue
2. Focus on affordability - stress test at 7-8% rates
3. Consider timing - late 2026 may offer better opportunities
4. Prioritize location - markets with stronger fundamentals offer better protection

For Sellers

• Price competitively - overpriced listings will languish
• Consider timing - spring 2026 may be better than fall
• Renewal planning - if in the 2021 cohort, consider selling before renewal

For Investors

• Focus on cash flow - markets where rents cover carrying costs
• Value-add potential - properties with renovation potential
• Geographic diversification - consider less affected markets
• Long-term horizon - 5-10 year holding periods

TD vs. Other Major Banks

Conclusion: Navigating the New Reality

TD's revised forecast reflects a more challenging environment for Canada's housing market in 2026. Key takeaways:

1. The "Higher for Longer" era is here - 5-6% mortgage rates are the new normal
2. Regional divergence will intensify - location selection is critical
3. The 2021 renewal wave is a major headwind - significant payment shocks ahead
4. Selective opportunities exist - focus on fundamentals, not speculation

This article is part of our 2026 Canada Housing Weekly Report series. For more detailed analysis on specific market segments, see our related reports on regional market splits, CREA data analysis, and mortgage renewal pressures.