The Canada Mortgage and Housing Corp. will soon release revised expectations for home price declines, which will be greater than the housing authority expected last summer, chief executive Romy Bowers said at a conference Thursday.

In July, a CMHC report said a surge in interest rates could drag national home values down by five per cent by the middle of 2023. While a formal revision won’t be released until October, Bowers said it is expected to be in the range of 10 to 15 per cent.

She said falling housing prices should make homes — which rose at unsustainable levels in the first year or so of the COVID-19 pandemic — more affordable. However, higher interest rates will offset the renewed affordability, she added during a discussion Thursday afternoon at the Bloomberg Canadian Finance Conference.

Bowers said “correcting the supply-demand imbalance” by building more homes including rental properties at all price points is the best way to remedy Canada housing affordability issues.

In May, CMHC released a comprehensive report that showed new housing starts have struggled to keep up with population growth in some of Canada’s large cities, especially Toronto, making affordability a “significant” challenge.

The following month, the housing authority said projected construction of new homes by 2030 would not be enough to solve Canada’s supply and affordability issues, concluding that an additional 3.5 million units would be required on top of those already in the works.

The CMHC report in June projected that housing stock would increase by 2.3 million units by 2030, reaching close to 19 million housing units, based on rates of new construction at the time. However, that “would need to climb to over 22 million… to achieve affordability for everyone living in Canada,” the report said.