The bank said in a new report Wednesday that the housing market is too soft to encourage builders to break ground on new homes at the pace needed to lift the economy and deliver a long overdue supply injection. “I think that we are in the early stages of this correction when it comes to the impact on the economy,” said CIBC deputy chief economist Benjamin Tal in an interview. Housing makes up a significant portion of Canada’s economy, and Tal said the run-up in prices and heightened real estate investment over the past two decades have only increased its weight on gross domestic product. The Canada Real Estate Association expects home sales to climb 5.1% this year after trade uncertainty drove a market slowdown in 2025. “The way to describe the housing market at this point is that houses are still too expensive to buy, not expensive enough to build,” Tal said.