The Canadian Real Estate Association (CREA) has adjusted its 2026 home sales forecast for the third time this year, lowering expectations amid a decline in September 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 an increase in bond yields and subsequently fixed mortgage rates, impacting the housing market, according to CREA. Although there was a slight uptick in monthly activity over the summer, CREA’s senior economist, Shaun Cathcart, attributes this to rising oil prices and concerns about potential interest rate hikes by the Bank of Canada to combat inflation, which may deter prospective homebuyers in the upcoming months.
Phil Soper, President and CEO of real estate firm Royal LePage, echoes similar sentiments, noting that the fall housing market has been softer than expected as buyers exhibit caution amidst global uncertainties stemming from Washington’s unclear communication.
September witnessed a decline in home sales, with a 2.3% drop compared to August and a 7.7% decrease from the previous year. Additionally, the number of newly listed properties decreased by 1.8% on a month-over-month basis, continuing a trend of declining supply since September 2025, as reported by CREA.
The average national home price stood at $666,538, reflecting a 1.6% decrease from the previous year. Regional markets in Vancouver and Toronto experienced notable weakness in September, while previously hot markets in the Prairies, Quebec, and the East Coast are also showing signs of cooling off.
Looking ahead, CREA anticipates a rebound in home sales next year, projecting a 4.4% increase in 2027 sales under the assumption of minimal rate adjustments by the Bank of Canada and increased borrower confidence in lending rates.