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 in home transactions 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. While there was a slight uptick in monthly activity over the summer, CREA’s senior economist, Shaun Cathcart, attributes the current market slowdown to rising oil prices and concerns about potential interest rate hikes by the Bank of Canada to combat inflation, which are expected to deter prospective homebuyers in the final months of the year.
Cathcart noted the challenges posed by U.S. tariffs and rising lending rates over the past two years, adding that current uncertainties may discourage many from entering the market this fall. Real estate company Royal LePage echoed similar sentiments, with President and CEO Phil Soper highlighting the cautious approach of potential buyers amidst global uncertainties affecting the fall housing market.
In September, home sales declined by 2.3% compared to August and 7.7% compared to the same period last year, reflecting the impact of economic factors on market performance. Additionally, the number of newly listed properties decreased by 1.8% on a month-over-month basis, continuing a 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. Regional markets in Vancouver and Toronto exhibited particular weakness in September, while markets in the Prairies, Quebec, and the East Coast, previously strong performers, have also started to show signs of cooling off.
Looking ahead, CREA anticipates a rebound in home sales next year, projecting a 4.4% increase in transactions for 2027 under an optimistic scenario where the Bank of Canada maintains limited rate adjustments and borrowers gain more clarity on lending rates.