The Canadian Real Estate Association (CREA) has once again adjusted its 2026 home sales forecast, with September data indicating 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 downward adjustments made in April and July.
The surge in oil prices since spring has led to increased bond yields, subsequently impacting fixed mortgage rates, which, according to CREA, has influenced the housing market negatively. While there was a slight uptick in monthly activity over the summer, CREA’s senior economist, Shaun Cathcart, expects rising oil prices and concerns about potential interest rate hikes by the Bank of Canada to deter more prospective homebuyers from entering the market in the upcoming months.
Cathcart expressed that ongoing uncertainties, compounded by previous challenges like U.S. tariffs and rising lending rates, have created a hesitant atmosphere among potential buyers. He believes that this uncertainty will likely discourage many from engaging in the market during the fall season.
Royal LePage, a real estate company, echoes similar sentiments, noting that the autumn housing market has been weaker than anticipated due to cautious potential buyers apprehensive about significant purchases amidst global uncertainties.
Recent data from CREA indicates a decline in September home sales by 2.3% compared to August and 7.7% compared to the same period last year. Additionally, the number of newly listed properties decreased by 1.8% month-over-month, continuing a trend of declining new supply since September 2025.
The average national home price stood at $666,538, reflecting a 1.6% decrease from the previous year. While markets in Vancouver and Toronto exhibited particular weakness in September, regions such as the Prairies, Quebec, and the East Coast, which had been experiencing strong market activity, have also begun to show signs of cooling off.
Looking ahead, Cathcart anticipates a period of pause as market participants await clarity on future interest rate movements. Despite the downward revision in the current forecast, CREA foresees a rebound in home sales next year. With an optimistic scenario of minimal rate adjustments by the Bank of Canada and increased borrower certainty on lending rates, CREA predicts a 4.4% rise in home sales in 2027.