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 anticipating a slight uptick in 2026 home sales, 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.
The surge in oil prices since spring has led to increased bond yields, impacting fixed mortgage rates, which, according to CREA, has had a dampening effect on the housing market. While there was a minor increase in monthly activity over the summer, CREA’s senior economist Shaun Cathcart anticipates that rising oil prices once again and concerns about potential interest rate hikes by the Bank of Canada to combat inflation will deter more prospective homebuyers from entering the market in the final months of the year.
Cathcart remarked on the ongoing challenges faced by the market due to U.S. tariffs and rising lending rates, expressing that current uncertainties may prompt many individuals to delay entering the market this fall.
Royal LePage, a real estate firm, echoes similar sentiments from potential buyers, noting a softer-than-expected fall housing market as buyers exercise caution amidst global uncertainties. President and CEO Phil Soper highlighted how the uncertain communication from Washington is directly influencing people’s decisions regarding substantial financial commitments like home purchases.
In September, the impact of these economic factors was evident in the sluggish sales figures reported by CREA. Home sales for the month dipped by 2.3% compared to August and were down by 7.7% from the same period last year. Additionally, the number of newly listed properties decreased by 1.8% on a monthly 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. While markets in Vancouver and Toronto exhibited particular weakness in September, regions like the Prairies, Quebec, and the East Coast, which had experienced strong activity, are also showing signs of cooling off.
Looking ahead, Cathcart emphasized the need for a pause in the market until there is clarity on future interest rate movements. Despite the revised forecast, 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.
