The Canadian Real Estate Association (CREA) has adjusted its 2026 home sales forecast downward for the third time this year, 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 reductions made in April and July.
The spike in oil prices since spring has led to higher bond yields, impacting fixed mortgage rates, which CREA believes has had a dampening effect on the housing market. 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 final months of the year.
Reflecting on the ongoing challenges faced by the market, Cathcart highlighted the impact of U.S. tariffs and rising lending rates, emphasizing the current climate of uncertainty. Real estate firm Royal LePage also noted a cautious approach among potential buyers due to global uncertainties, with President and CEO Phil Soper highlighting the influence of erratic communications from Washington on major financial decisions like home purchases.
In September, home sales experienced a 2.3% decline from August and a 7.7% drop from the previous year. Additionally, the number of newly listed properties decreased by 1.8% month-over-month. 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 exhibited weakness in September, while previously robust markets in the Prairies, Quebec, and the East Coast showed signs of cooling. Despite the current forecast downgrade, CREA foresees a rebound in home sales next year under the assumption of minimal rate adjustments by the Bank of Canada and increased borrower confidence in lending rates, with a projected 4.4% increase in home sales for 2027.