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 adjustments made in April and July.
The surge in oil prices since spring has led to increased bond yields and subsequently fixed mortgage rates, impacting the housing market negatively, according to CREA. Although there was a slight uptick in monthly activity over the summer, CREA’s senior economist, Shaun Cathcart, believes rising oil prices and concerns about potential interest rate hikes by the Bank of Canada to combat inflation will likely deter more potential homebuyers 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 in the housing market for the past two years. The current environment of uncertainty could lead many individuals to postpone homebuying decisions this fall.
Royal LePage, a real estate firm, echoes similar sentiments from potential homebuyers, noting a softer fall housing market than expected due to global uncertainties. President and CEO Phil Soper emphasized that the unpredictable messaging from Washington is influencing people’s hesitancy to make significant financial commitments like purchasing a home.
In September, home sales exhibited a decline, with a 2.3% drop compared to August and a 7.7% decrease from the previous year, as reported by the CREA. Additionally, newly listed properties decreased by 1.8% on a month-to-month basis, continuing a trend of declining new supply since September 2025.
The average national home price stood at $666,538, reflecting a 1.6% decrease from the previous year. Regional markets in Vancouver and Toronto experienced particular weakness in September, while markets in the Prairies, Quebec, and the East Coast, previously robust, began to show signs of cooling off.
Despite the revised forecast, CREA anticipates a rebound in home sales next year under an optimistic scenario where the Bank of Canada implements limited rate adjustments and borrowers gain more clarity on lending rates. CREA projects a 4.4% increase in home sales for 2027.