Canada’s housing market showed signs of renewed activity in June, with home sales increasing for a second consecutive month. However, economists remain cautious about declaring a full recovery.

According to data released Tuesday by the Canadian Real Estate Association (CREA), national home sales rose 2.8% in June compared to May, building on a 3.6% gain in May. CREA noted that sales have rebounded by 17.3% since April, following a decline that began late last year and extended through the early months of 2024.

Home prices remained largely unchanged in June compared to May and were down 1.3% year-over-year. Meanwhile, the number of listings at the end of June was up 11.4% from the same time last year.

Here’s what economists are predicting for the Canadian housing market over the remainder of the year.

“Canada’s housing market remains stagnant,” wrote Robert Kavcic, senior economist at BMO Capital Markets, citing muted sales activity, a steady flow of new listings, and continued price declines.

Kavcic attributed the recent sales uptick to sellers adjusting their expectations, having backed away from the elevated price points seen during the housing boom of 2022.

However, he pointed to three key factors that continue to hinder a full market recovery: ongoing uncertainty from the global trade environment, mortgage rates hovering around 4%—which are still too high to significantly improve affordability—and a bearish market sentiment, with many potential buyers holding off in anticipation of further price drops.

Kavcic also identified Southern Ontario, including Toronto, Kitchener-Waterloo, and Barrie, as notable weak spots. An oversupply of condos in these areas is weighing on prices, and values for single-detached homes are also trending downward.

Home sales in Calgary dropped by 18%, marking a sharp reversal from the market’s overheated conditions just a few years ago.

“The resale housing market made another modest gain in June,” said Tony Stillo, Director of Canada Economics at Oxford Economics Ltd., “but it’s likely to slip back into stagnation if a trade agreement isn’t secured by the new August 1 deadline—when the U.S. is set to raise tariffs on Canada to 35%.”

Despite three consecutive months of rising home sales, Stillo noted that the market remains significantly subdued, with activity still 14% below the five-year average.

He also pointed out that the MLS benchmark home price declined in June for the seventh straight month, and has fallen by nearly 18% since peaking in February 2022.

“Without a swift resolution to the tariff issue, Canada’s housing downturn may persist into 2026,” Stillo warned.

Oxford Economics forecasts that a recession triggered by a prolonged trade conflict could lead to 140,000 job losses, a rise in distressed home sales, and weakened buyer demand—all of which could contribute to further price declines.

Canada’s housing market has already reversed the brief rebound in sales and prices that followed the Bank of Canada’s interest rate cut in June 2024, according to Daren King, economist at National Bank of Canada Financial Markets.

In June, home sales rose in six of the ten provinces. Prince Edward Island led with a 7% increase, followed by 5.8% in British Columbia, 5.3% in Ontario, 3.5% in Nova Scotia, 2.7% in Saskatchewan, and 2.3% in Quebec.

However, declines were recorded in the remaining provinces: sales fell 6.4% in New Brunswick, 4.5% in Newfoundland, 2.1% in Manitoba, and 1.7% in Alberta.

King noted that a brief easing in trade tensions earlier in the year may have encouraged some buyers to enter the market. But that window appears to have closed.

“It’s still too soon to say whether this marks the start of a sustained recovery in Canada’s housing market,” he said.

For the first half of 2025, total home sales were down 4.6% compared to the same period in 2024, marking their lowest level since 2020, he added.