The Financial Post reports in its Thursday edition that TD Bank has downgraded its outlook for Canada's housing market in 2026 and is calling for home sales to fall 5 per cent as higher bond yields take their toll. The Post's Gigi Suhanic quotes Rishi Sondhi, an economist at TD, saying: "That's very much the driving factor. These higher yields are likely already impacting Canada's housing market, with sales declining for the first time in six months in August." Home sales fell 0.7 per cent In August from July, and the national benchmark price was flat month over month, the Canadian Real Estate Association said earlier this month, adding that the higher cost of borrowing was weighing on the sector. At the mid-point of this year, TD had called for home sales to fall 3 per cent in 2026. It also predicted flat prices for the year, which it still does. TD doesn't see any borrowing relief in the near term. It is now calling for the yield on the five-year bond -- which is used to set fixed mortgage rates -- to hit 3.6 per cent in the third quarter, compared with a forecast in June for a yield of around 3 per cent. TD's forecast assumes the Bank of Canada continues to hold interest rates at 2.25 per cent through next year.