The Canadian Real Estate Association (CREA) has adjusted its 2026 home sales forecast for the third time this year, with a decline in sales seen across Canada 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 downward adjustments made in April and July, driven by the surge in oil prices impacting bond yields and fixed mortgage rates.
While there was a slight uptick in monthly activity over the summer, CREA’s senior economist Shaun Cathcart highlights that rising oil prices and concerns about potential interest rate hikes by the Bank of Canada are likely to deter more homebuyers from entering the market in the upcoming months. Cathcart emphasized the ongoing challenges faced by the market due to factors like U.S. tariffs and increasing lending rates.
Royal LePage, a real estate company, echoes similar sentiments, noting that potential homebuyers are displaying caution amidst global uncertainties, causing a softer fall housing market than expected. President and CEO Phil Soper mentioned the impact of uncertain messaging from Washington on people’s decisions regarding significant financial investments like home purchases.
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 activity. Additionally, newly listed properties decreased by 1.8% on a month-over-month basis, with a consistent decline in new supply since September 2025. The national average home price also dropped by 1.6% year-over-year to $666,538.
Regional markets, particularly in Vancouver and Toronto, experienced weakness in September, while previously booming markets in the Prairies, Quebec, and the East Coast have started to cool down. Looking ahead, CREA anticipates a rebound in home sales next year under an optimistic scenario where the Bank of Canada maintains limited rate adjustments and borrowers gain more clarity on lending rates, projecting a 4.4% increase in home sales for 2027.