CREA cuts 2026 home sales forecast to 444,530, down 5.2%
CREA cut its 2026 home sales forecast for the third time, now expecting 444,530 sales, down 5.2% from 2025, as higher fixed mortgage rates and a hawkish Bank of Canada crimp demand.
The Canadian Real Estate Association marked down its 2026 home sales forecast for the third time this year, now projecting 444,530 transactions. That would be a 5.2% drop from 2025, a steeper decline than the 1.4% year-over-year fall the group predicted in July.
CREA also trimmed its national average price forecast. It now expects a 0.2% annual increase to $681,681, roughly $5,000 below the summer estimate.
The association blamed a “roller-coaster year” shaped by the global energy crisis, which has kept inflation risks elevated and borrowing costs volatile. Higher fixed mortgage rates and lingering uncertainty around variable rates curbed September activity, CREA said, adding that the Bank of Canada has adopted “a notably more hawkish tone.”
National home sales in September fell 7.7% from a year earlier and 2.3% from August.
“After a four-month run of modestly positive progress on demand, supply, and prices, many of Canada’s housing markets took a step back in September,” said Shaun Cathcart, CREA’s senior economist, in a news release. 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.”
Worries about rising borrowing costs led to a “significantly” shorter fall market than usual, said Marco Pedri, a broker with Shoreline Realty. Buyers who wanted to lock in a favorable rate already moved in the summer or early fall, he said, leaving sellers waiting for demand to return.
“It’s honestly a game of chicken. It’s about who’s going to cave first,” Pedri said. He expects many purchasers to wait until early next year, when sellers who have had properties listed for months may be more willing to negotiate.
In September, the national average sale price fell 1.6% from a year earlier to $666,538. CREA’s own home price index, which tracks typical-home sales, edged 0.4% lower from August and dropped 3.4% year-over-year. New listings fell 1.8% month-over-month, while total active listings at month-end topped 200,000, up 1.8% from a year earlier.
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