The Canadian Real Estate Association (CREA) has adjusted its 2026 home sales forecast for the third time this year, with September data indicating a decline in sales nationwide. Initially anticipating a slight increase in home sales for 2026, CREA now projects a 5.2% decrease compared to the previous year. This revision follows similar downward adjustments made in April and July.
The surge in oil prices since spring has led to an increase in bond yields and subsequently fixed mortgage rates, impacting the housing market, according to CREA. Although there was a slight uptick in monthly activity over the summer, CREA’s senior economist Shaun Cathcart suggests that rising oil prices and concerns about potential interest rate hikes by the Bank of Canada to combat inflation will likely deter more prospective homebuyers in the remaining months of the year.
Cathcart highlighted ongoing uncertainties in the market due to U.S. tariffs and rising lending rates, indicating a cautious approach among buyers. Real estate firm Royal LePage echoes similar sentiments, noting that the fall housing market has been softer than anticipated as buyers remain hesitant amid global uncertainties.
September witnessed a decline in home sales, with a 2.3% drop from August and a 7.7% decrease compared to the same month last year. Additionally, the number of newly listed properties decreased by 1.8% on a month-over-month basis, with a general trend of declining new supply since September 2025, as reported by CREA.
The average national home price stood at $666,538, marking a 1.6% decrease from the previous year. While markets in Vancouver and Toronto exhibited weakness in September, regions like the Prairies, Quebec, and the East Coast, which had been robust, are also showing signs of cooling off.
Despite the downward revision in sales projections, CREA anticipates a rebound in home sales for 2027 under an optimistic scenario where the Bank of Canada maintains limited rate adjustments and borrowers gain more clarity on lending rates, forecasting a 4.4% increase in home sales next year.
