OTTAWA – From coast-to-coast builder confidence is on the decline, the Canadian Home Builders’ Association (CHBA)’s recently released Q1 2026 Housing Market Index (HMI) shows.
Even regions like Atlantic Canada and the Prairies that had been weathering the trade-war storm are now slowing.
The CHBA’s HMI is an analysis of homebuilder sentiment and is an indicator about the current and future health of the residential construction industry in Canada with respect to housing units for ownership (freehold or condominium).
According to a release, the 2026 Q1 single-family index fell 5.5 points to 20.9, which is just 1.3 points above the all-time record low. The multi-family index reached a third consecutive new record low and now sits at 13.4.
In March, CMHC data indicated units slated for rental markets represented 56 per cent of all urban starts. Given affordability challenges in recent years, there has been a drastic shift to rental starts. In 2021, about 70 per cent of housing starts were for ownership; that number is now below 50 per cent.
CHBA CEO Kevin Lee stresses in a statement that the federal government needs a plan focused on homeownership, and that the provinces must implement funding strategically to reduce taxes, and swiftly, to avoid further market confusion.
“The federal government’s $1.7 billion one-time cash injection to provincial governments to reduce housing costs and support more housing supply is a positive step forward, but it is critical that provincial governments use the funds effectively,” said Lee.
“Reducing government-imposed costs is the most immediate and effective way to improve housing supply and affordability for homeownership. Eliminating taxes on new homes, reducing skyrocketing development charges, and finding low and no-cost measures to support homeownership affordability – like responsible changes to the mortgage stress test – should be part of a robust federal plan for supporting homeownership,”
The CHBA did note the Q1 survey was put out into the field the day before the Ontario government announced its intention to expand the HST rebate from only first-time buyers to all eligible buyers of new construction homes valued up to $1 million.
Here are some other highlights from the HMI:
- While Ontario and B.C. have been bearing the brunt of diminished buyer confidence and affordability challenges, other regions of the country are also starting to slip: the Prairies continued their decline, with Q1 showing their first recent pessimistic reading for the multi-family HMI, and the Atlantic provinces posted their first pessimistic reading on record for the single-family HMI since the survey began in 2021.
- On the labour spectrum, nationally, 47 per cent of builders said they or their subcontractors have needed to lay off workers due to market conditions. In Ontario, this proportion rose to 65 per cent.
“Broad layoffs will leave the residential construction industry without capacity, which will hinder its ability to ramp back up when the market turns around, which means supply will continue to be constrained. More action is needed now by all levels of government to help stem the tide on job losses in the sector. Canada needs a comprehensive plan that includes support for homeownership to reach the government’s own housing targets and alleviate market-rate affordability challenges so that the next generation of Canadians can hope to have something close to the same opportunities as their parents,” said Lee.
