The Canadian Real Estate Association (CREA) has adjusted its 2026 home sales forecast downward for the third time this year, with September witnessing a decline in sales nationwide. Initially anticipating a slight increase in home sales for 2026, 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 an increase in bond yields, subsequently impacting fixed mortgage rates, according to CREA. This has had a dampening effect on the housing market.
Although there was a slight uptick 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 homebuyers from entering the market in the remaining months of the year.
Cathcart highlighted the ongoing uncertainties, including U.S. tariffs and rising lending rates, that have created a volatile environment, causing many prospective buyers to adopt a cautious approach towards home purchases.
Royal LePage, a real estate company, echoes similar sentiments, noting a softer fall housing market than expected due to global uncertainties. President and CEO Phil Soper emphasized that the unpredictable rhetoric from Washington is influencing individuals’ decisions on significant financial commitments like home purchases.
In September, CREA reported a 2.3% decrease in home sales compared to August and a 7.7% decline from the previous year. Additionally, the number of newly listed properties dropped by 1.8% on a month-over-month basis, continuing a trend of declining supply since September 2025.
The average national home price stood at $666,538, reflecting a 1.6% decrease compared to the previous year. While Vancouver and Toronto markets showed particular weakness in September, regions like the Prairies, Quebec, and the East Coast, previously strong markets, have also begun to cool off.
Looking ahead, CREA anticipates a rebound in home sales next year, projecting a 4.4% increase in 2027 under the assumption of minimal rate changes by the Bank of Canada and improved borrower confidence in lending rates.