The Canadian Real Estate Association (CREA) has adjusted its forecast for 2026 home sales downwards for the third time this year, as sales declined nationwide in September. Initially anticipating a slight increase in home sales for 2026, CREA now projects a 5.2% decrease in home transactions compared to the previous year. This revision follows similar reductions made in April and July.
The surge in oil prices since spring has had a ripple effect on bond yields and fixed mortgage rates, impacting the market negatively, according to CREA. Although there was a slight increase in monthly activity over the summer, rising oil prices again and concerns about potential interest rate hikes by the Bank of Canada to combat inflation are expected to deter more potential homebuyers in the final months of the year.
CREA’s senior economist, Shaun Cathcart, highlighted the ongoing challenges faced by the housing market, citing factors such as U.S. tariffs and rising lending rates as well as the current uncertainty contributing to people’s reluctance to enter the market this fall.
Real estate company Royal LePage also noted caution among potential homebuyers due to global uncertainty, with President and CEO Phil Soper attributing this to the inconsistent communication from Washington affecting individuals’ willingness to make significant financial decisions like purchasing a home.
In September, home sales saw a decline of 2.3% compared to August and a 7.7% drop from the previous year, reflecting the impact of economic uncertainties. Additionally, the number of newly listed properties decreased by 1.8% month-over-month, continuing a trend of declining supply since September 2025, as reported by CREA.
The national average home price decreased by 1.6% year-over-year to $666,538. Weakness was particularly observed in Vancouver and Toronto markets in September, while previously strong markets in the Prairies, Quebec, and the East Coast have started to cool off.
Looking ahead, CREA anticipates a rebound in home sales next year under an optimistic scenario with minimal rate adjustments by the Bank of Canada and increased borrower certainty, projecting a 4.4% increase in home sales for 2027.