New home selling conditions reach a critical low point for future industry capacity

January 28, 2026 – Ottawa, ON – The latest quarterly Housing Market Index results published by the Canadian Home Builders’ Association (CHBA) continue to raise red flags, signaling even fewer future housing starts for homeownership and warning of diminished long-term industry capacity if layoffs continue and strategic action is not taken to help the market rebound soon.

The Q4 single-family index fell again, dropping 5.5 points to 19.6 (out of 100), marking the second consecutive record low and the first time the single-family HMI has fallen below a score of 20. The multi-family index also saw a second consecutive record low, with a score of 14.7, which is down 7.3 points from a year ago. Regionally, Ontario and British Columbia continue to struggle and lead the way in broad pessimism among both single- and multi-family builders. With Ontario and B.C. already extremely low previously, the further drop in the national HMI this quarter largely stems from sharp declines in the Prairie provinces, which recorded the first pessimistic reading in two years among single-family builders, while the multi-family HMI dropped further into the negative and continued the downward trend that began in Q2 2024.

The enhanced GST Rebate for first-time buyers of new homes still has not become law despite having been announced in March 2025, which continues to further hurt new home sales by keeping first-time buyers on the sidelines.

“The federal government has shifted its focus away from housing affordability for middle-income Canadians. Support for non-market housing is important, but it should not come at the expense of measures to improve market-rate housing affordability; both can be improved. It’s time for the government to re-focus on measures to support average Canadians and homeownership,” said CHBA CEO Kevin Lee.

A recent public opinion study by Abacus Data for CHBA showed that 88% of Canadians under the age of 45 would like to own a home one day. Being a homeowner is not just financially important to Canadians; the data proves that it is still very emotionally central to them. But only 29% of all non-homeowners are confident they’ll ever be able to buy a home. Canadians see the housing crisis as a systemic failure affecting the middle class as much as low-income households, and 66% say the federal government is most responsible for solving the crisis.

Builders uniformly agreed that the single most impactful policy the government could implement to turn new home selling conditions around quickly would be to expand the federal GST rebate on homes under $1.5 million to all buyers, rather than just first-time buyers. It should also be extended to renovations that create new housing units.

Another substantial factor contributing to a lack of affordability is development taxes. The federal government must work with the provinces and municipalities to lower development taxes.

A third measure that would immediately help with affordability is fixing the stress test, which is unduly cautious and locks well-qualified buyers out of the market or keeps them from buying the home that best suits their needs.

“The Q4 Housing Market Index indicates that home selling conditions have reached a critical low point for future industry capacity, with 38 percent of members reporting layoffs. If changes aren’t made now, it will be much harder for the residential construction industry to ramp up in the future and build the homes that Canada needs to correct the housing supply deficit and improve housing affordability for the next generation,” said Lee.

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MEDIA INQUIRIES

Journalists wishing to interview Kevin Lee, Chief Executive Officer of the Canadian Home Builders’ Association are encouraged to submit their request by email to media@chba.ca.

About the HMI

CHBA’s HMI provides a leading market indicator for both the single-family and multi-family markets in Canada, before permits and starts. Released on a quarterly basis, the HMI provides insight into the industry, including many of the issues that are affecting housing affordability, with a strong correlation to future housing starts. The data for the CHBA HMI comes from an exclusive panel of hundreds of CHBA home builders and developers from coast to coast. Every quarter, this panel responds to a series of questions about market conditions. CHBA then uses proprietary statistical analysis to prepare the quarterly HMI. In addition to the standard HMI questions, each quarter CHBA asks “special questions” that allow the Association to gather data and insights into current issues affecting the industry across the country.

For more information on CHBA’s HMI, including the detailed methodology and key takeaways, please visit the official CHBA HMI webpage.