Published: January 16th, 2026 • Last Updated: January 16th, 2026
Author: Ross Taylor on AskRoss.ca

Housing Forecasts, Rate Trends, and Mortgage Advice for Buyers in 2026

January always brings a flood of questions, but this year one stands out: “Is now a good time to buy a home?”

After a rocky few years of rising interest rates, inflation, and affordability challenges, many Canadians, especially in Toronto, are wondering if 2026 might finally be the moment to make a move.

If you’re on the fence, you’re not alone.

Let’s unpack what’s really happening in the housing market right now, where rates are headed, how to approach your mortgage strategy, and whether it makes sense to buy in today’s environment.

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• What’s happening in the Canadian housing market in 2026?
• What’s the 2026 outlook for Toronto home prices?
• What’s going on with interest rates in 2026?
• Should you choose a variable or fixed mortgage rate in 2026?
• Is January 2026 a good time to buy a home in Toronto?
• What about first-time buyers?
• Bottom line: Buying a home in Toronto in 2026
• List of all FAQs: Buying a Home in Toronto in 2026

What’s happening in the Canadian housing market in 2026?

The story heading into 2026 is one of cautious optimism. The Canadian Real Estate Association (CREA) is forecasting that national home sales could rebound by 5.1% to 7.7%, reaching up to 509,479 units, the strongest activity since 2021.

But don’t expect runaway price growth. We’re in what I’d call a “Goldilocks zone” right now. Not too hot, not too cold.

CREA projects a modest 2.8% price increase, bringing the national average to about $698,881, a sustainable climb that reflects improving affordability without sparking another overheated market.

What are the key trends driving the national market?

• Affordability is improving: Rate relief and adjusted pricing have helped restore some purchasing power.
• More inventory, more balance: After years of frenzied bidding wars, buyers finally have more choice and leverage.
• First-time buyers are back: Many who were priced out over the past four years are now re-entering the market, especially in the sub-$750K segment.

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What’s the 2026 outlook for Toronto home prices?

If you’ve been waiting for prices in the GTA to come down, this might be your moment.

Most forecasts are calling for a 3.5% to 5.7% decline in Toronto home prices this year. Average prices are currently sitting at around $1.05M to $1.07M, depending on the property type and location.

While it’s not a dramatic drop, it’s meaningful, especially for buyers who were previously priced out.

What’s behind the price pressure?

• Investor-owned units have pushed condo listings and inventory sharply higher, especially downtown.
• Ongoing economic uncertainty, including U.S. tariffs and slower Canadian growth, is keeping some buyers cautious.
• New construction delays are limiting future supply while softening near-term demand.

That said, it’s not all bad news for condos.

Premium, transit-oriented, and university-adjacent buildings are holding up comparatively well, and larger units with good layouts are drawing interest from both end-users and downsizers.

Detached homes in established neighbourhoods are also showing early signs of price stability, and I expect these segments to lead any spring recovery.

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What’s going on with interest rates in 2026?

The Bank of Canada is signalling a more stable rate environment, but they’ve made it clear that future decisions will be based on how inflation and economic data evolve over the coming quarters.

In my view, we’re unlikely to see significant further drops from here, barring a sharper economic slowdown or external shock.

That means we’re likely near the bottom of this current rate cycle, which has significant implications if you’re planning to buy and considering whether to go fixed or variable.

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Should you choose a variable or fixed mortgage rate in 2026?

It’s the classic question, and in today’s climate, the answer really depends on your goals and risk tolerance.

Fixed rates may be more appealing for many borrowers who value payment certainty in a relatively stable, but still uncertain, rate environment.

Comparing fixed and variable in 2026

Fixed mortgage advantages:

• Protects against unexpected rate hikes
• Makes budgeting easier with stable payments
• Aligns with current rate floor signals from the Bank of Canada

Variable mortgage considerations:

• Could offer savings if rates trend lower
• May have lower prepayment penalties if you plan to break early
• Requires flexibility to handle payment fluctuations

If you’re the type of buyer who loses sleep over rising rates, fixed may be the right call. But if you’re comfortable with a bit of uncertainty and looking for more flexibility, a well-structured variable option might still work.

Not sure where to start? Reach out to us.

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Is January 2026 a good time to buy a home in Toronto?

For many well-qualified, long-term buyers, yes.This could be a smart time to enter the market.

We’re in a moment where prices have softened, listings are more plentiful, and buyers aren’t being forced into panic decisions. That’s not something we’ve been able to say for years in the GTA.

Reasons it may be a good time to buy:

• Prices are down, offering a more affordable entry point.
• Inventory is up, giving you more choices.
• Spring activity will come, and may bring more competition later.
• Interest rates are stable, providing mortgage planning certainty.

The best deals are made when everyone else is too scared to act.

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What about first-time buyers?

If you’ve been on the sidelines since 2020, this may be your opportunity.

Many first-time buyers are now able to qualify for financing thanks to lower rates, longer amortization options, and support from family.

And while prices are still high by historical standards, some sanity has returned to the market.

First-time buyer insights for 2026

• Under-$750K homesare seeing strong activity and are the first to move.
• Detached homes and townhousesare offering better long-term value than small condos.
• Pre-approvals mattermore than ever. Get your financing lined up early.
• Fixed rates provide securityif you’re budget-conscious and planning to stay put.

If you’re prepared and realistic about your goals, 2026 could be your best chance to get into the market without being caught in a frenzy.

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Bottom line: Buying a home in Toronto in 2026

This year isn’t about jumping in blindly. It’s about making a smart, strategic move in a more balanced market.

If you’re ready, prepared, and focused on the right property for your needs, there are real opportunities out there. The key is to pick a mortgage strategy that suits your situation and stay focused on homes you can comfortably afford.

Whether you’re buying your first place, upgrading, or simply trying to get off the rental treadmill, let’s make a plan that makes sense for you.

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List of all FAQs: Buying a Home in Toronto in 2026

Is now a good time to buy a home in Toronto?

• Many experts believe 2026 is a strong entry point thanks to lower prices, more listings, and mortgage stability.
  

Will Toronto home prices continue to fall in 2026?

• Forecasts suggest a 3.5% to 5.7% price decline, but some segments, like detached homes, may stabilize sooner.
  

What’s happening with interest rates in 2026?

• Rates appear to have stabilized, with the Bank of Canada signalling no significant drops unless the economy weakens.
  

Should I choose a fixed or variable mortgage rate in 2026?

• Fixed rates offer peace of mind, while variable rates could offer savings if you’re comfortable with fluctuations.
  

Are first-time buyers getting back into the market?

• Yes, lower rates and price adjustments have allowed many first-time buyers to qualify again, especially under $750K.
  

What are the best property types for value in 2026?

• Detached homes and townhouses in established areas are showing better long-term value than small downtown condos.
  

Should I wait until spring to buy a home?

• Spring may bring more competition. If you’re ready now, current conditions may be more favourable.
  

How do I know if I’m financially ready to buy?

• If you’ve been pre-approved, understand your budget, and can afford monthly payments without strain, you’re likely ready.
  

What should first-time buyers focus on in 2026?

• Focus on getting pre-approved, targeting properties under $750K, choosing the right mortgage term, and working with experienced professionals.
  

What support is available for first-time buyers in Ontario?

• Programs like the FHSA, RRSP Home Buyer Plan, and Land Transfer Tax rebates are available to assist with buying costs.

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