Canada’s Housing Market Slows as 2026 Home Sales Forecast Drops Again

Home sales across Canada are slowing, prompting a third downward revision to the 2026 housing market forecast. The latest projection estimates that 5.2 per cent fewer homes will be sold this year compared to 2025. Rising oil prices, higher fixed mortgage rates and uncertainty about future interest rate increases are contributing to the slowdown.

Economic uncertainty is causing many potential homebuyers to delay purchasing decisions. Concerns about inflation, possible interest rate hikes and ongoing international trade tensions have made buyers more cautious. Many households are hesitant to commit to a major financial decision while the economic outlook remains uncertain.

September housing market data reflects these concerns, with home sales falling 2.3 per cent compared to August and 7.7 per cent compared to September of the previous year. The number of newly listed properties also declined by 1.8 per cent month over month. Meanwhile, the national average home price dropped to $666,538, representing a 1.6 per cent decrease from the same month last year.

Some of Canada's largest housing markets experienced particularly weak activity, while previously strong markets in the Prairie provinces, Quebec and Atlantic Canada also began to cool. The number of newly listed properties has generally been declining since September 2025, suggesting that both buyers and sellers are becoming more cautious as they wait for greater certainty about borrowing costs and market conditions.

Despite the weaker outlook for 2026, the housing market is expected to recover somewhat in 2027. Forecasts predict that home sales could increase by 4.4 per cent next year, provided interest rate changes remain limited and borrowers gain more certainty about mortgage costs. Until then, economic uncertainty and concerns about affordability are likely to continue influencing Canada's housing market.