The Canadian Real Estate Association (CREA) has adjusted its forecast for 2026 home sales downward for the third time this year, with September data revealing a decline in sales nationwide. Initially expecting a slight increase in home sales for 2026, CREA now anticipates a 5.2% decrease in home transactions compared to the previous year. This revision follows similar downgrades in April and July.
Rising oil prices since spring have led to increased bond yields and subsequently fixed mortgage rates, impacting the housing market, according to CREA. Despite a slight uptick in monthly activity over the summer, CREA’s senior economist Shaun Cathcart predicts that surging oil prices and concerns about potential interest rate hikes by the Bank of Canada to combat inflation will deter more homebuyers in the remaining months of the year.
Cathcart reflected on the challenges faced over the past two years, including U.S. tariffs and rising lending rates, with the current uncertainty likely causing many individuals to delay entering the housing market this fall. Real estate firm Royal LePage echoes these sentiments, noting a softer fall housing market due to cautious prospective buyers hesitant to make significant financial commitments amid global uncertainties.
September saw a decline in home sales, with figures showing a 2.3% decrease compared to August and a 7.7% drop from the previous year. Additionally, newly listed properties decreased by 1.8% on a month-over-month basis, continuing a trend of declining supply since September 2025, as reported by CREA. The average national home price stood at $666,538, representing a 1.6% decrease from the previous year.
Regional markets in Vancouver and Toronto experienced notable weakness in September, while markets in the Prairies, Quebec, and the East Coast, previously strong performers, have begun to cool off. Despite the current market conditions, CREA foresees a rebound in home sales next year, projecting a 4.4% increase in 2027 under an optimistic scenario with minimal rate changes by the Bank of Canada and increased borrower certainty regarding lending rates.