Bank of Canada’s second‑in‑command sharpened the link between falling prices and lasting relief
The Bank of Canada’s senior deputy governor signalled that lower home prices are a necessary part of fixing Canada’s affordability crunch, even as wars, tariffs and trade tensions kept jostling the broader inflation outlook.
Speaking after new data showed a rare five‑year decline in average prices, Carolyn Rogers said the central bank is reassessing how much housing weakness it has built into its forecasts.
“The housing market is looking weaker and weaker than we had incorporated into our January outlook so that's something we have to look at certainly when we prepare the April outlook,” Rogers said.
“As you would know I'm sure some of the more recent data coming out of March looks like we might see a bit of a rebound but it's probably too early to tell,” she said.
“So definitely we need to take a look at the housing market.”
Affordability path runs through price correction
Rogers drew a straight line between price declines and any credible path back to affordability in Canada’s biggest cities.
“What I would say about prices is we need house prices to come down so that housing is more affordable,” she said.
“We've all been worried about how fast house prices went up in recent years and now we're worried about how they're coming down. We do need them to settle down a bit for housing to get more affordable.”
“There isn't really a path to affordability, particularly in some of our big centers without house prices correcting a bit,” she said. “So we will watch that.”
Those comments landed in a market already adjusting to a 2.25% policy rate and a national housing sector that showed no signs of a sharp recovery as of late January, when the Bank last held rates steady.
Bank of Canada saying the quiet part out loud. House prices need to come down to become more affordable. pic.twitter.com/7rvJwhMl94
— Steve Saretsky (@SteveSaretsky) March 18, 2026
Housing, inflation and the renewal squeeze
Rogers did not quantify how another 10% drop in average prices might filter into inflation, stressing instead that “housing is one of the things that feeds into our forecast and our deliberations on monetary policy.”
For mortgage professionals, her message fit a pattern. Affordability gains remain modest and uneven even as rate cuts and softer prices took hold, with RBC and other forecasters warning that the easy phase of relief is nearly over.
At the same time, Canada Mortgage and Housing Corporation (CMHC) estimates that restoring affordability to pre‑pandemic levels would require 430,000–480,000 new units a year for a decade – a build‑out that has yet to materialize.
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