The Canadian Real Estate Association (CREA) has lowered its 2026 home sales forecast for the third time this year, predicting that transactions will drop by 5.2 per cent compared to 2025. This downward revision follows a decline in September home sales, which fell 7.7 per cent compared to the same month last year.
Why are 2026 home sales forecast levels dropping?
Economic pressures are currently weighing on the Canadian housing market. CREA officials cited several factors contributing to the cooling demand:
- Rising fixed-rate mortgages driven by soaring oil prices and bond yields.
- Anticipation of potential interest rate hikes by the Bank of Canada to combat inflation.
- Global economic uncertainty and shifting political language from Washington.
CREA senior economist Shaun Cathcart noted that buyers are resisting market entry due to this volatility. "Now it's the uncertainty, and I think a lot of people are going to resist jumping in this fall because of that," Cathcart said.
September market performance
Monthly data reflects the broader downward trend. In September, national home sales decreased by 2.3 per cent compared to August. While the number of new listings also saw a slight decline of 1.8 per cent, the drop in sales has outpaced the reduction in supply.
Price indicators also showed signs of cooling. The MLS Home Price Index edged down by 0.4 per cent month-over-month, while the national average sale price fell 1.6 per cent compared to the previous year. The national sales-to-new listings ratio sat at 48.8 per cent in September, slightly lower than the 49.1 per cent recorded in August.
FAQ
How much did September sales fall?
National home sales in September were down 2.3 per cent from August and 7.7 per cent compared to September 2025.
What is the new 2026 sales projection?
CREA now expects 5.2 per cent fewer homes to change hands in 2026 than in the previous year.
