Sellers waiting for a robust fall housing market have been handed another dose of reality as the Canadian Real Estate Association (CREA) significantly trims its outlook for the remainder of the year and heading into 2027.
Since July, CREA has stripped 18,806 residential sales from its 2026 forecast, reflecting a shifting landscape defined by higher borrowing costs and a shrinking pool of active buyers. The association now projects a total of 444,530 residential transactions nationwide for 2026, marking a 5.2 per cent decline compared to the final tally for 2025.
The downward revision follows a sluggish September, during which national home sales fell 2.3 per cent from August on a seasonally adjusted basis. Over the same period, new listings dropped by 1.8 per cent. Market analysts note that this dynamic reveals a troubling underlying trend: the national housing market has been losing potential buyers at a faster rate than it has been shedding new supply, creating a disconnect between seller expectations and what active purchasers can actually afford.
National pricing indicators also softened at the end of the third quarter. The national benchmark price slipped 0.4 per cent in September, interrupting a four-month period of relative stability. On an unadjusted basis, the benchmark price sat 3.4 per cent below the levels recorded in September 2025, while the national average sale price fell 1.6 per cent annually to $666,538.
For real estate professionals, these shifts complicate conversations with homeowners eager to test the market. A seller might point to a comparable property that fetched a strong price during the summer months, but real estate advisors must account for the reality of today’s financing environment. Because a buyer must secure a mortgage under prevailing interest rates, any agent defending an ambitious asking price must factor in how much a purchaser’s borrowing capacity has deteriorated since those comparable sales took place.
Balanced, with fewer buyers
Despite the reduction in transaction volumes, the broader national market continues to hover within historically balanced territory, albeit with a thinner pool of active participants.
Canada’s national sales-to-new-listings ratio eased slightly to 48.8 per cent in September, down from 49.1 per cent in August. This sits below the long-term historical average of 54.7 per cent, though it remains comfortably within CREA’s traditional balanced market threshold of roughly 45 to 65 per cent.
At the close of September, just over 200,000 homes were actively listed across the country, representing a modest 1.8 per cent increase year-over-year. Seasonally adjusted months of inventory edged up to 4.9, aligning closely with historical norms. These figures suggest that Canada is currently experiencing a slow housing market rather than one buckling under an exceptional, oversupplied surplus of inventory.
However, a smaller pool of active buyers leaves overpriced listings with very few opportunities to find someone willing to stretch their finances. While sellers retain the option to hold out for a higher price, carrying costs—including monthly mortgage payments, property taxes, and ongoing maintenance bills—continue to accumulate.
Industry experts emphasize that a realistic listing strategy must be grounded in current local conditions rather than broad national averages. A comprehensive preparation process should begin by examining competing homes currently on the market, reviewing prices that have successfully generated actual sales in recent weeks, and calculating the carrying costs a seller incurs by waiting. Relying on a national forecast of stable prices offers thin support when local buyers are actively rejecting inflated asking prices.
Ontario has less room for optimism
Regional variations across Canada highlight stark contrasts in local market health. Ontario continues to experience some of the most subdued conditions in the country, leaving little room for local optimism.
In September, Ontario’s residential sales-to-new-listings ratio stood at 41.9 per cent, a negligible change from August’s reading of 41.8 per cent. By comparison, market conditions were notably firmer in other provinces, with British Columbia recording a ratio of 43.9 per cent, Alberta reaching 57.6 per cent, and Manitoba leading the way at 64.4 per cent.
These provincial figures illustrate vastly different levels of buyer competition. Because Ontario’s market was already dealing with weak fundamentals, the onset of September brought further price contractions as purchasers grappled with elevated borrowing costs.
CREA’s seasonally adjusted composite benchmark price fell across several key Ontario markets in September. Prices dropped 0.5 per cent in the Greater Toronto Area, 0.8 per cent in Mississauga, 1.2 per cent in Hamilton-Burlington, and 1.5 per cent in Ottawa. Conversely, pockets of southwestern Ontario bucked the provincial trend, with Kitchener-Waterloo and London-St. Thomas posting modest monthly gains.
To navigate these uncertain waters, market advisors recommend establishing a clear price-review date before a property officially goes live. If initial showings and formal offers fail to materialize within a reasonable timeframe, both the agent and the seller should already have a predetermined strategy in place. Waiting until a listing has gone stale on the market only makes that corrective conversation more difficult and costly.
The forecast keeps losing sales
The steady retreat in projected transaction volumes underscores how persistent economic headwinds have forced forecasters to temper their expectations.
As recently as July, CREA’s outlook anticipated 463,336 residential sales for 2026 and 480,567 transactions for 2027. By October, those projections were scaled back significantly to 444,530 and 464,235 sales, respectively, alongside adjustments to the 2025 comparison base.
While transaction volumes have taken a notable hit, the national price outlook has experienced much milder revisions. CREA currently expects the national annual average price to edge up 0.2 per cent to $681,681 in 2026, followed by a further 1.2 per cent increase to $689,909 in 2027. At the provincial level, Ontario is projected to record a 3 per cent decline in average prices this year, followed by a modest 0.7 per cent rebound next year.
Analysts caution that these annual averages can remain relatively stable even as current benchmark prices trend downward, as they are heavily influenced by the specific mix of housing types changing hands. Consequently, individual sellers cannot simply apply a national forecast figure, such as a 0.2 per cent anticipated increase, directly to their own property’s valuation.
Pent-up demand is still waiting
Discussions surrounding a wave of pent-up demand have grown notably quieter as market sluggishness persists. While CREA’s longer-term projections for 2027 still account for potential sidelined buyers returning to the market, September’s softer data and successive downward revisions highlight the financial hurdles facing prospective movers. Ultimately, individuals who wish to purchase a home still require sufficient income and a mortgage approval capable of supporting today’s purchasing power.
The anticipated market rebound heading into 2027 relies heavily on several economic assumptions, including a return to steady economic growth, stronger population inflows, and greater certainty regarding interest rate trajectories. CREA’s baseline forecast assumes limited policy action from the Bank of Canada over the coming year, despite financial markets having priced in expectations for additional tightening when the projections were assembled. Any unexpected monetary policy tightening would pose further challenges to an already modest recovery.
Even if CREA’s projected 4.4 per cent sales rebound materializes in 2027, total transaction volumes would still remain roughly 0.9 per cent below the levels achieved in 2025. While established brokerages are generally structured to absorb such fluctuations, individual sellers face a more immediate imperative: pricing a home realistically to attract a qualified buyer who can successfully close a transaction in the present market environment.