Home sales and prices fell in September as buyers face higher mortgage rates
The national benchmark price dropped 0.4 percent last month and sales activity declined 7.7 percent from a year earlier.
Canadian home sales and prices fell in September as higher mortgage rates continued to cool the housing market. The Canadian Real Estate Association reported 36,657 residential sales last month, a drop of 7.7 percent compared to September 2025. On a seasonally adjusted basis, sales fell 2.3 percent from August. The national benchmark price declined 0.4 percent during September and was 3.4 percent below its level from a year earlier. The average sale price fell 1.6 percent annually to $666,538.
The association blamed the weaker outlook on another increase in fixed mortgage rates and uncertainty over how far variable rates may rise. Its October forecast points to renewed energy-related inflation risks and a more hawkish Bank of Canada. "The assumption of an easy return to cheaper borrowing has become harder to defend," CREA said. While buyers may negotiate a lower purchase price, they still face mortgage payments they may not be able to carry, as lenders have not necessarily become more generous with financing. There were slightly more than 200,000 homes listed for sale at the end of September, a modest increase of 1.8 percent from a year earlier. The national months of inventory, a measure of how long it would take to sell all current listings at the present sales pace, stood at 4.9 months on a seasonally adjusted basis. This figure varied significantly by province, with British Columbia at 7.0 months, Ontario at 4.7 months, Manitoba at 2.4 months and Saskatchewan at 3.4 months.
CREA forecasts a slight 0.2 percent increase in the national annual average sale price to $681,681 in 2026. This modest national gain masks expected declines in two of the country's largest markets. Ontario’s average price is forecast to fall 3 percent to $809,334, while British Columbia’s is projected to drop 0.8 percent. Gains in other provinces, such as Newfoundland and Labrador and Saskatchewan, are expected to keep the national figure slightly positive. The national average is projected to reach $689,909 in 2027, a 1.2 percent increase.
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Market performance over a longer period shows stark regional differences. From September 2021 to September 2026, the seasonally adjusted composite benchmark fell 14.7 percent in the Greater Toronto Area and 15.3 percent in Hamilton-Burlington. Over the same five-year period, Calgary’s benchmark rose 24.6 percent, Quebec City’s increased 54.4 percent and St. John’s climbed 41.2 percent. For homeowners in weaker Ontario markets, waiting has not guaranteed a better sale price, and moving can mean accepting less equity while financing a new purchase at a higher rate.
The association now expects 444,530 sales in 2026 and 464,235 in 2027. The forecast rebound of 4.4 percent in 2027 would still leave annual sales 4,436 below the projected level for 2025. CREA's outlook suggests buyers are expected to return after economic growth, renewed population growth and a clearer interest-rate path provide more support. That forecast also assumes limited further action by the Bank of Canada. The September data showed how quickly higher borrowing costs can interrupt a recovery in housing activity.
With files from Storeys