RBC Calls 2027 for Canadian Housing Recovery, What Homeowners Miss in the Wait
Home resales climbed for the fourth consecutive month in July 2026, marking the longest upward streak since the market began cooling in early 2023. Inventory plateaued. Prices stopped their freefall in most major centers. From the surface, these look like recovery signals. RBC's September outlook names 2027 as the year the market regains full vitality. The wait most homeowners are enduring right now is the beginning of a long second act that many are misreading as a pause.
The Sideways Years
The Canadian housing market is stabilizing. Stabilization is what happens when the forces pushing prices down meet the forces preventing a collapse, and the market settles into a range rather than a direction.
What RBC describes as "stubborn weakness" is the shape the market takes when affordability improves slightly but not enough to spark urgency, when job prospects brighten but incomes still lag median home prices by a qualifying gap most buyers cannot close, and when rates ease but the stress test still demands household income well above what the typical first-time buyer earns. The result is a market that moves sideways for quarters at a time.
The resale streak that began in April 2026 is real, but it is climbing from a low base. July 2026 sales were down 5.3% year-over-year nationally, according to CREA. The CREA Home Price Index fell 3.3% over the same period. Montreal saw sales drop 13% year-over-year in August, even as inventory rose 18%. Greater Vancouver listings sat 26.2% above the ten-year seasonal average. These are the conditions that precede a plateau.
What the Inventory Leveling Reveals
The fact that new listings and total inventory have flattened rather than spiked tells you something about who is not selling. Homeowners who locked in rates between 1.5% and 2.5% during the 2020, 2021 window are not moving unless forced. Porting a 1.79% mortgage to today's renewal rates, even with the Bank of Canada's recent cuts, means taking on a payment that could be 60% higher on the same principal.
This creates a secondary lock-in effect that has nothing to do with market timing. A household that bought in Mississauga in 2021 for $950,000 at 1.79% is paying roughly $3,100 monthly in principal and interest. The same household renewing today at 4.5% would face $4,900. Selling to move up, move laterally, or downsize all require accepting that new rate environment. Many are choosing to stay.
That choice keeps supply below what a normal market would produce, which props up prices artificially. It also means the inventory that does hit the market skews toward distressed sellers, new construction, or investors exiting. Buyers have time and leverage, but the homes available are often priced at thresholds that still require incomes most do not have.
The 2027 Framing Is the Story
When RBC frames 2027 as the recovery year, what they are signaling is that the structural barriers, qualification gaps, higher-for-longer rates, the psychological shift away from housing as a guaranteed wealth engine, take years to work through, not quarters. Buyers waiting for a return to 2020 conditions are waiting for something that is not coming back. Prices in Vancouver West are holding near $1.8 million for detached homes because supply is constrained and the floor has held.
The recovery, when it arrives, will not feel like 2016 or 2021. It will feel like a market where wages have caught up slightly, where rates have normalized to a range people can plan around, and where the qualifier "affordable" no longer requires air quotes in every sentence. That takes time the market has not yet spent.
Home resales climbed for the fourth consecutive month in July 2026, marking the longest upward streak since the market began cooling in early 2023. Inventory plateaued. Prices stopped their freefall in most major centers. From the surface, these look like recovery signals. RBC's September outlook names 2027 as the year the market regains full vitality. The wait most homeowners are enduring right now is the beginning of a long second act that many are misreading as a pause.
The Sideways Years
The Canadian housing market is stabilizing. Stabilization is what happens when the forces pushing prices down meet the forces preventing a collapse, and the market settles into a range rather than a direction.
What RBC describes as "stubborn weakness" is the shape the market takes when affordability improves slightly but not enough to spark urgency, when job prospects brighten but incomes still lag median home prices by a qualifying gap most buyers cannot close, and when rates ease but the stress test still demands household income well above what the typical first-time buyer earns. The result is a market that moves sideways for quarters at a time.
The resale streak that began in April 2026 is real, but it is climbing from a low base. July 2026 sales were down 5.3% year-over-year nationally, according to CREA. The CREA Home Price Index fell 3.3% over the same period. Montreal saw sales drop 13% year-over-year in August, even as inventory rose 18%. Greater Vancouver listings sat 26.2% above the ten-year seasonal average. These are the conditions that precede a plateau.
What the Inventory Leveling Reveals
The fact that new listings and total inventory have flattened rather than spiked tells you something about who is not selling. Homeowners who locked in rates between 1.5% and 2.5% during the 2020, 2021 window are not moving unless forced. Porting a 1.79% mortgage to today's renewal rates, even with the Bank of Canada's recent cuts, means taking on a payment that could be 60% higher on the same principal.
This creates a secondary lock-in effect that has nothing to do with market timing. A household that bought in Mississauga in 2021 for $950,000 at 1.79% is paying roughly $3,100 monthly in principal and interest. The same household renewing today at 4.5% would face $4,900. Selling to move up, move laterally, or downsize all require accepting that new rate environment. Many are choosing to stay.
That choice keeps supply below what a normal market would produce, which props up prices artificially. It also means the inventory that does hit the market skews toward distressed sellers, new construction, or investors exiting. Buyers have time and leverage, but the homes available are often priced at thresholds that still require incomes most do not have.
The 2027 Framing Is the Story
When RBC frames 2027 as the recovery year, what they are signaling is that the structural barriers, qualification gaps, higher-for-longer rates, the psychological shift away from housing as a guaranteed wealth engine, take years to work through, not quarters. Buyers waiting for a return to 2020 conditions are waiting for something that is not coming back. Prices in Vancouver West are holding near $1.8 million for detached homes because supply is constrained and the floor has held.
The recovery, when it arrives, will not feel like 2016 or 2021. It will feel like a market where wages have caught up slightly, where rates have normalized to a range people can plan around, and where the qualifier "affordable" no longer requires air quotes in every sentence. That takes time the market has not yet spent.
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