Weekly Real Estate News
Summary
Canadian resale home sales fell 2.3 percent month over month in September 2026 and 7.7 percent from a year earlier; CREA reports weakening prices and fewer new listings.
Canada’s resale housing market lost momentum in September as rising fixed mortgage rates pushed buyers back to the sidelines. National home sales fell 2.3% from August, the Canadian Real Estate Association said Friday, October 16, reversing part of a summer recovery.
The decline followed a 0.7% decrease in August. Actual transactions, which are not seasonally adjusted, were 7.7% lower than in September 2025, according to CREA’s October 16 market release. The association’s MLS Home Price Index fell 0.4% from August and 3.4% from a year earlier. The separate national average selling price was C$666,538, down 1.6% year over year.
Those price measures answer different questions. The Home Price Index attempts to control for differences in the mix of properties sold, while the national average is affected by the locations and types of homes changing hands. Neither number should be treated as a precise measure of what every Canadian homeowner has lost.
Fewer buyers, fewer new listings
New listings declined 1.8% from August. Because sales slipped a little faster than supply, the sales-to-new-listings ratio moved down to 48.8% from 49.1%. CREA places readings between roughly 45% and 65% in the range generally consistent with a balanced market. The September result therefore signals weaker demand, not a nationwide buyer’s market by the association’s definition.
More than 200,000 homes were listed for sale on Canadian MLS systems at month-end, 1.8% more than a year earlier. Inventory represented 4.9 months of sales, broadly in line with its long-run average. The figures suggest the market is softening without the kind of national inventory surge that would normally indicate severe distress.
Ontario was a key source of weakness. CREA said the latest monthly price decline reflected a renewed drop in Ontario prices, while price gains in the Prairies, Quebec and Atlantic Canada were moderating. National figures mask substantial differences in supply, employment and affordability among provinces and cities.
Interest-rate expectations complicate the outlook
CREA senior economist Shaun Cathcart attributed the reversal to the latest rise in fixed mortgage rates and expectations that the Bank of Canada may need to increase its policy rate before the end of the year. That is the association’s assessment, not a confirmed future central-bank decision.
Canadian mortgage financing differs from the U.S. system in an important way: many Canadian borrowers renew their mortgage terms periodically rather than locking in a fixed rate for 30 years. Higher renewal costs can therefore affect existing households as well as first-time buyers, even when home prices have softened.
Friday’s report arrives alongside a new CREA forecast that sharply reduces expected sales for 2026. The association now projects 444,530 sales this year, down 5.2% from 2025, compared with its July forecast of 463,336 sales. The revised forecast is a projection, not a tally of completed transactions.
The divergence between weaker transactions and comparatively stable available inventory matters to lenders, brokers and builders. Sellers may need to adjust expectations, while qualified buyers could gain negotiating room. But lower prices do not automatically restore affordability when borrowing costs rise faster than home values fall.
CREA’s next monthly resale report is scheduled for November 17. The next Bank of Canada policy decision, rather than speculation about it, will provide another important test of the rate-sensitive housing market.
