The Canadian Real Estate Association (CREA) has adjusted its forecast for home sales in 2026, projecting a 5.2% decrease compared to the previous year. This revision comes after earlier downward adjustments made in April and July, as oil price increases impacted bond yields and fixed mortgage rates, affecting the market.
While there was a slight increase in monthly activity over the summer, rising oil prices and concerns about potential interest rate hikes by the Bank of Canada are expected to deter more homebuyers in the remaining months of the year. CREA’s senior economist, Shaun Cathcart, highlighted ongoing uncertainties impacting the market, including U.S. tariffs and lending rate fluctuations.
President and CEO of Royal LePage, Phil Soper, echoed similar sentiments, noting that global uncertainties and volatile economic conditions have made prospective buyers more cautious. The housing market has been softer than anticipated as buyers hesitate to make significant financial commitments amidst the prevailing uncertainty.
In September, home sales declined by 2.3% compared to August and 7.7% compared to the same period last year. Additionally, the number of newly listed properties dropped by 1.8% month-over-month, continuing a trend of decreasing new supply since September 2025. The average national home price fell to $666,538, down by 1.6% from the previous year.
Regional markets in Vancouver and Toronto experienced notable weakness in September, while previously vibrant markets in the Prairies, Quebec, and the East Coast have also begun to cool off. CREA anticipates a rebound in home sales next year, with a projected increase of 4.4% in 2027 under optimistic conditions of minimal interest rate adjustments and improved borrower certainty regarding lending rates.
