Is a Real Estate Crash Coming in 2026? Rates, Prices & What You Need to Know

With Mortgage Expert Dion Beg & Gary McGowan

As we move into 2026, uncertainty looms over the housing and financial markets in both Canada and the U.S. Will dropping interest rates cause a real estate rebound, or are we headed toward a subprime-style crash? In a recent conversation between mortgage broker Dion Beg and real estate professional Gary McGowan, the two unpack the numbers, the trends, and what buyers and sellers need to know right now.

🔥 Key Takeaways from the Conversation

**1. **

Trump’s Push to Slash Interest Rates

Former President Donald Trump is calling for immediate credit card interest rate cuts, possibly from the high 20s to just 10 percent. While this might sound like relief for consumers, Dion Beg warns that this could actually encourage habitual overspending, creating a debt bubble similar to the 2008 subprime crisis.

“People may think their credit is cheap now and overspend, forgetting that rates will surge again in 12 months,” said Beg.

**2. **

U.S. Pressure on the Federal Reserve

There’s growing political pressure from Trump’s camp to remove Jerome Powell as Fed Chair, allegedly over budget overruns on a federal project. But Dion and Gary point out the real reason: the administration wants someone who will cut interest rates quickly.

Why does this matter for Canadians?

“What happens in the U.S. ripples into Canada,” Dion explains. If the Fed slashes rates, the Bank of Canada may have no choice but to follow, even if it’s not ideal for our economic health.

📉 2026 Real Estate Market Update: Toronto & Beyond

The Toronto market is showing clear signs of slowdown. According to the Toronto Regional Real Estate Board (TRREB):

• 2025 ended with just 62,000 home sales, the lowest in 25 years
• Average home prices dropped from $1.3M in early 2022 to about $1M today
• Inventory is building up, but many homes remain unsold
• New construction and condo sales have plunged to 1990s levels

“We’re sitting on 3 to 4 months of inventory, and much of it hasn’t moved in nearly two years,” says McGowan.

🏡 Who Should Buy or Sell Right Now?

If you’re thinking of upgrading from a townhouse to a detached home, now might be the perfect time. The price gap between entry-level and move-up homes has narrowed, giving buyers more room to negotiate.

On the flip side, sellers might want to act sooner rather than later.

“Spring usually brings more listings and more competition for sellers,” warns Dion.

And with boomers holding onto their homes longer, we’re seeing less natural turnover in the market.

🧠 Final Thoughts: Be Informed, Not Fearful

There’s no crystal ball. But understanding current trends and acting based on what’s true today can help you make smart, informed decisions.

Whether you’re buying, selling, or refinancing, it’s critical to:

• Watch both Canadian and U.S. policy moves
• Monitor local inventory and price trends
• Speak with experts who are in the trenches daily

“We don’t know what the market will look like in 6 or 12 months,” Gary says. “But we do know what it’s doing today and that’s where your decision should come from.”