CREA Lowers 2026 Home Sales Forecasts as September Home Sales Drop Due to Higher Mortgage Costs

06:20 AM EDT, 10/16/2026 (MT Newswires) -- The Canadian Real Estate Association (CREA) on Friday revised down again its 2026 home sales forecast following September's decline, as rising mortgage costs and uncertainty around interest rates dampened market activity. CREA forecasts 444,530 home sales in 2026, down 5.2% from the year before as activity is expected to weaken toward year-end. The national average home price is projected to edge up 0.2% to CA$681,681. Fixed mortgage rates have risen on renewed inflation concerns and a more hawkish Bank of Canada stance, further straining housing affordability, wrote CREA in a note. "The recent shift in fixed-rate mortgage affordability, combined with continued uncertainty around variable rates, has already shown up in the form of lower home sales activity in September," it said in the note. Canadian home sales are forecast to rise 4.4% to 464,235 in 2027, while average prices are expected to increase 1.2% to CA$689,909, supported by economic and population growth and greater interest rate certainty, added CREA. Home sales dropped 2.3% on the month in September, according to CREA in a separate note on Friday. Sales were 7.7% below year-earlier levels. Home prices remained under pressure in September, with the National Composite MLS Home Price Index (HPI) declining 0.4% from August and 3.4% year-over-year, added CREA. The national average selling price fell 1.6% annually to CA$666,538.