The Canadian Real Estate Association (CREA) has adjusted its 2026 home sales forecast for the third time this year, with September data indicating a decrease in sales nationwide. Initially predicting a slight increase in home sales for the year, CREA now anticipates a 5.2% decline in home transactions compared to the previous year. This adjustment follows downward revisions made in both April and July.
The surge in oil prices since spring has led to higher bond yields, subsequently affecting fixed mortgage rates, which, according to CREA, has impacted the housing market. Although there was a slight uptick in monthly activity over the summer, CREA’s senior economist, Shaun Cathcart, notes that rising oil prices and concerns about potential interest rate hikes by the Bank of Canada to combat inflation are likely to deter more homebuyers in the final months of the year.
Cathcart described the current situation as a roller-coaster ride over the past two years, citing challenges posed by U.S. tariffs and increasing lending rates, leading to uncertainty that may discourage prospective buyers from entering the market this fall.
Royal LePage, a real estate company, echoes similar sentiments from potential homebuyers, with President and CEO Phil Soper highlighting a softer-than-expected fall housing market due to global uncertainties, including the impact of language from Washington on people’s financial decisions.
September witnessed a decline in home sales, with figures down 2.3% from August and 7.7% from the same period last year. Additionally, newly listed properties decreased by 1.8% on a month-over-month basis, with a continuous decline in new supply since September 2025, as reported by CREA. The average national home price stood at $666,538, marking a 1.6% decrease compared to the previous year.
Regional markets in Vancouver and Toronto experienced particular weakness in September, while hot markets in the Prairies, Quebec, and the East Coast have started to cool off. Cathcart anticipates a period of pause across all markets until next year’s interest rate scenario becomes clearer.
Despite the current forecast downgrade, CREA projects a rebound in home sales for 2027, with a 4.4% increase, contingent upon limited rate changes by the Bank of Canada and improved borrower certainty regarding lending rates.
