The Canadian Real Estate Association (CREA) has revised its 2026 home sales projection downward for the third time this year, as sales decreased across Canada in September. Initially anticipating a slight uptick in home sales for 2026, CREA now forecasts a 5.2% decline in home transactions compared to the previous year. This adjustment follows similar downward revisions made in April and July, attributed to the surge in oil prices impacting bond yields and fixed mortgage rates, which, according to CREA, had a dampening effect on the housing market.
Although there was a slight increase in monthly activity over the summer, CREA’s senior economist Shaun Cathcart anticipates that rising oil prices 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 remaining months of the year. Cathcart expressed that ongoing uncertainties, including U.S. tariffs and rising lending rates, have created a roller-coaster effect for the real estate market over the past two years, leading many to hold off on major financial decisions like home purchases.
Royal LePage, a real estate company, echoed similar sentiments from potential homebuyers, noting a softer-than-expected fall housing market due to global uncertainties. President and CEO Phil Soper highlighted how the unpredictable language from Washington has directly influenced people’s hesitancy to commit to significant financial investments like buying a home.
In September, the economic factors translated into a decline in home sales, with figures showing a 2.3% drop compared to August and a 7.7% decrease from the previous year. Newly listed properties also decreased by 1.8% on a month-over-month basis, reflecting a trend of declining new supply since September 2025, as reported by CREA. The national average home price stood at $666,538, marking a 1.6% decrease from the previous year.
Regionally, markets in Vancouver and Toronto experienced notable weakness in September, while previously hot markets in the Prairies, Quebec, and the East Coast have started to cool off as well. Cathcart emphasized the need for a pause across all regions until there is more clarity on future interest rate movements.
Despite the downward revision in the forecast, CREA anticipates a rebound in home sales for the next year. With an optimistic scenario of minimal rate adjustments by the Bank of Canada and increased borrower certainty on lending rates, CREA projects a 4.4% increase in home sales for 2027.