The Canadian Real Estate Association (CREA) has adjusted its 2026 home sales forecast for the third time this year and reported a decline in September 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 adjustment follows similar downward revisions made in April and July.
The surge in oil prices since spring has led to increased bond yields, subsequently impacting fixed mortgage rates, as highlighted by CREA. This trend has had a dampening effect on the housing market.
Although there was a slight increase in monthly activity during the summer, CREA’s senior economist Shaun Cathcart anticipates ongoing challenges due to rising oil prices and concerns about potential interest rate hikes by the Bank of Canada to combat inflation. These factors are expected to deter more potential homebuyers from entering the market in the final months of the year.
According to Cathcart, the ongoing uncertainties, including U.S. tariffs and escalating lending rates, have created a cautious atmosphere, prompting many individuals to postpone home buying decisions amid global economic uncertainties.
Real estate firm Royal LePage echoes similar sentiments, noting that the fall housing market has been softer than expected, with potential buyers exercising caution in light of the prevailing global uncertainties and erratic communication from Washington affecting their financial decisions.
September witnessed a decline in home sales, with transactions dropping 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.
The average national home price stood at $666,538, marking a 1.6% decrease from the previous year. Market conditions were particularly weak in Vancouver and Toronto, while regions like the Prairies, Quebec, and the East Coast, which had experienced robust growth, began to show signs of cooling off.
Despite the revised forecast, CREA remains optimistic about a rebound in home sales next year. With a positive outlook that includes minimal rate adjustments by the Bank of Canada and increased borrower certainty regarding lending rates, CREA forecasts a 4.4% increase in home sales for 2027.