The Canadian Real Estate Association (CREA) has adjusted its 2026 home sales forecast downward for the third time this year, with September data reflecting a decline in sales nationwide. Initially projecting 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 adjustments made in April and July due to the surge in oil prices impacting bond yields and fixed mortgage rates, according to CREA.
Although there was a slight uptick in monthly activity over the summer, CREA’s senior economist, Shaun Cathcart, attributes the anticipated slowdown in homebuying activity to rising oil prices and concerns about potential interest rate hikes by the Bank of Canada to combat inflation. Cathcart highlighted the ongoing uncertainties in the market, with many potential buyers likely to delay their purchasing decisions in the coming months.
Royal LePage, a real estate company, echoes these sentiments, noting that prospective homebuyers are exercising caution amidst global uncertainties, leading to a softer fall housing market than expected. President and CEO Phil Soper emphasized the impact of uncertain economic conditions on individuals’ willingness to make significant financial commitments like home purchases.
The latest data from CREA reveals a decline in September home sales, with a 2.3% decrease compared to August and a 7.7% decline from the previous year. Additionally, the number of newly listed properties decreased by 1.8% on a monthly basis, continuing a trend of declining supply since September 2025. The average national home price stood at $666,538, down by 1.6% 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 robust, have started to cool off. Cathcart emphasized the need for a pause in the market to assess future interest rate developments.
Despite the revised forecast for 2026, CREA anticipates a rebound in home sales next year under an optimistic scenario where the Bank of Canada implements limited rate adjustments and borrowers gain more clarity on lending rates. The association projects a 4.4% increase in home sales for 2027.