The Canadian Real Estate Association (CREA) downgraded its 2026 home sales forecast for the third time this year, reflecting a pattern of caution that has settled over the housing market.
CREA now expects a total of 444,530 homes to change hands by the end of 2026. This figure represents a 5.2% decline compared with the number of homes sold in 2025. The association also projects that the national average home price will edge up 0.2% to $681,681 over the same period.
CREA now expects home sales decline in 2026 as it lowers forecast again https://t.co/sD4EPMzZCH
In September, home sales recorded over Canadian MLS® Systems fell by 7.7% year-over-year. The number of newly listed properties also decreased, while the MLS® Home Price Index retreated.
The number of newly listed properties also decreased, while the MLS® Home Price Index retreated.
CREA attributes the weakening trend to a combination of rising oil costs and growing apprehension about further interest rate hikes. Fixed mortgage rates have climbed recently, and market observers widely anticipate that the Bank of Canada will follow with another rate increase before the year ends. These factors have weighed on buyer confidence and contributed to a more cautious atmosphere.
CREA further downgrades forecast for Canadian home sales this year https://t.co/MdUbAsJiVW
Shaun Cathcart, a senior analyst with CREA, noted that after a four-month run of modestly positive momentum on demand, supply and prices, many Canadian housing markets took a step back in September. He said the pullback was "hardly surprising given the latest jump in fixed mortgage rates, and with the Bank of Canada now widely expected to follow with a rate hike before the end of the year." Cathcart added that the ongoing uncertainty has made many prospective buyers hesitant to jump into the market this fall.
Garry Bhaura, the Chair of CREA, offered a counterpoint, observing that while higher borrowing costs make the task harder for prospective home buyers, the situation could also lead to more homes on the market and greater negotiating power for those who do decide to purchase.
CREA now expects home sales decline in 2026 as it lowers forecast again https://t.co/h0HzKk1eij
Despite the current headwinds, CREA's outlook includes a modest rebound in 2027, forecasting a 4.4% increase in home sales relative to the 2026 projection. For now, the association characterizes the market as remaining cautious amid global uncertainty, with participants watching closely for any shifts in monetary policy or energy prices.