TD Cuts Canadian Home Sales Forecast as Bond Yields Rise

TD Economics has downgraded its Canadian home sales forecast due to rising bond yields. The bank expects national home sales to fall 5.3% this year, a sharper decline than initially predicted.

This comes as the five-year Government of Canada yield has climbed about 90 basis points over the past year, with TD now anticipating yields will remain higher through next year.

The bank's baseline assumes the Bank of Canada will hold its policy rate at 2.25% until the end of 2027, but even under this scenario, sales are expected to stay below pre-pandemic levels next year.