A Canada’s housing market took a step back in September, with home sales and prices both declining as renewed uncertainty around mortgage rates weighed on prospective buyers.
According to the latest figures released on October 16 from the Canadian Real Estate Association (CREA), national home sales fell 2.3% in September 2026 compared to August, while the non-seasonally adjusted national average home price came in at $666,538.
With housing affordability still a concern for many Canadians, the latest figures offer a closer look at how the market is shaping up heading into the final months of 2026.
Here’s what you need to know.
Canadian home sales decline in September
Home sales declined 2.3% month-over-month in September, following several months of modest improvements in the housing market.
When comparing to the same time last year, actual (not seasonally adjusted) home sales were down 7.7%.
Several major Canadian markets experienced a slowdown compared to September 2025, including:
• Greater Toronto Area — Sales fell 9% year-over-year, according to the Toronto Regional Real Estate Board.
• Metro Vancouver — Sales declined 8.4% year-over-year, coming in 25% below the region’s 10-year seasonal average, according to Greater Vancouver REALTORS®.
• Ottawa — Sales were down 6.6% year-over-year, although activity increased slightly compared to August, says the Ottawa Real Estate Board.
Not every market followed the same trend, though. In Calgary, detached home sales increased by more than 4% compared to last September, despite overall sales being lower.
What’s driving a national slowdown in sales?
You may have noticed that fixed mortgage rates have been increasing. In fact, all six major Canadian banks raised fixed mortgage rates by up to 0.5 points over recent weeks. Combine that with uncertainty surrounding inflation and the possibility of further Bank of Canada interest rate hikes (which would directly impact variable rate holders), and it’s understandable why some prospective buyers may be having second thoughts.
“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.
For buyers who have been watching the market, borrowing costs remain an important consideration, particularly when determining how much home they can comfortably afford.
Is housing market favouring buyers or sellers?
Fewer homes sold in September, but fewer properties were also being listed.
Nationally, new listings declined 1.8% compared to August, continuing a general downward trend in new supply that began in early 2025.
The national sales-to-new-listings ratio dropped to 48.8% in September, from 49.1% in August. (Generally, a reading between 45% and 65% indicates a balanced housing market.)
With September’s ratio sitting toward the lower end of that range, national conditions continue to lean in a buyer’s favour, while remaining technically balanced.
There were also slightly more than 200,000 properties listed for sale across Canadian MLS® Systems at the end of September, up 1.8% compared to last year and a little above the long-term average.
Of course, conditions can look quite different depending on where you’re searching.
In Calgary, for example, detached homes remained in balanced market conditions, while higher supply levels for apartments and row homes continued to create more favourable conditions for buyers.
For anyone looking to buy a home, these differences could mean more selection, less competition and potentially greater negotiating room, depending on the local market and type of home.
What’s happening with Canadian home prices?
The non-seasonally adjusted national average home price was $666,538 in September 2026, down 1.6% compared to September 2025.
CREA’s MLS® Home Price Index (HPI), which tracks price changes while accounting for differences in the types of homes being sold, also declined.
Month-over-month, the MLS® HPI was down 0.4% compared to August, while year-over-year, it declined 3.4% compared to September 2025.
CREA revises its housing market forecast
Alongside September’s housing statistics, CREA released an updated forecast for national home sales and average prices in 2026 and 2027.
With borrowing costs rising again and uncertainty surrounding future interest rate decisions, CREA has lowered its expectations for home sales over the remainder of 2026.
The association now forecasts 444,530 homes will change hands across Canada in 2026, representing a 5.2% decline from 2025. The national average home price is expected to reach $681,681, a slight increase of 0.2% year-over-year.
Looking ahead to 2027, CREA is foreasting national home sales will increase 4.4% to 464,235 transactions, while the national average home price is forecast to rise 1.2% to $689,909.
While CREA expects fewer homes to sell in 2026 than previously anticipated, its national home price forecast remains largely unchanged from July.
Much of the uncertainty comes down to where interest rates go from here. Financial markets have been anticipating further Bank of Canada rate hikes, but how much rates will actually increase, if at all, remains anyone’s guess.
CREA’s current forecast assumes relatively limited action by the Bank over the next year, with a modest recovery in sales activity expected in 2027 as economic growth continues and buyers gain greater clarity around borrowing costs.
However, that all depends on how borrowing costs and the broader economy evolve.
For Canadians hoping to enter the housing market, September’s numbers suggest there may be opportunities to consider, particularly in areas where inventory has increased and prices have softened.
Just remember: national trends don’t alwaysreflect what’s happening in your preferred neighbourhood. Understanding local market conditions, knowing your budget and working with an experienced REALTOR® can help you make an informed decision about when and where to buy.
— REALTOR.ca