Canada Home Sales Fall 2.3% in September as Mortgage Rates Rise — and a Bank of Canada Hike Looms

I'll be honest: if you've been house-hunting anywhere in Canada this fall, September didn't hand you the break you were hoping for. The national numbers landed this morning, and they're ugly — home sales fell again, listings dried up, and the Bank of Canada is now on everyone's lips for the wrong reason.

The Canadian Real Estate Association released its monthly data on Friday, October 16, and the headline figure is a 2.3% month-over-month drop in national home sales for September. That's on top of a 0.7% decline in August. Compared with September of last year, sales are down 7.7%. Prices are sliding too: the MLS Home Price Index slipped 0.4% from August and sits 3.4% below where it was a year ago.

September home sales data: the numbers that hurt

Let's walk through what the CREA data actually shows, because the details matter more than the headline.

New listings — the fresh supply that gives buyers something to choose from — fell 1.8% month-over-month in September, wiping out the rebound we saw in August. That pushed the national sales-to-new-listings ratio down to 48.8%, from 49.1% in August. For context, the long-term average is 54.7%. Anything well under that average tilts the balance toward buyers, so technically this is buyer-friendly territory. But it doesn't feel that way when the reason is nobody buying rather than everybody selling.

After four months of what CREA's senior economist Shaun Cathcart called "modestly positive progress on demand, supply, and prices," the whole board took a step back in September. His explanation, according to the association's release: "This was hardly surprising given the latest jump in fixed mortgage rates, and with the Bank of Canada now widely expected to follow with a rate hike before the end of the year."

Mortgage rates Canada 2026: why fixed rates did the damage

Here's the part nobody loves talking about, but it's the engine under everything. Fixed mortgage rates jumped in recent months, and fixed rates move with bond yields, not with the Bank of Canada's overnight rate. Global bond yields have climbed on higher energy prices and sticky inflation, and that drags Canadian fixed mortgage rates up whether Ottawa lifts a finger or not.

Meanwhile the Bank of Canada itself has become the market's new favourite guessing game. Nobody seriously expects a hike at the October 28 decision — but according to Reuters, money markets are now pricing in a 25-basis-point increase in December. That's the "fresh round of uncertainty" Cathcart warned about, and it's exactly the kind of fog that sends buyers back to the sidelines.

Cathcart put the uncomfortable question plainly in the release: "With housing affordability already stretched, the big question going forward is how much farther will the Bank have to go to keep a lid on inflation next year?"

CREA slashes its 2026 forecast — again

Buried inside the same data drop is something arguably more telling than the September numbers. CREA revised its full-year 2026 forecast downward once more, and this time the new projection is blunt: about 5.2% fewer homes will change hands this year than did in 2025.

That is a long way from where the association started the year. CREA entered 2026 expecting a modest increase in national sales, then walked it back in April, walked it back again in July, and has now effectively admitted the year is going the other way entirely.

Royal LePage isn't any sunnier. The brokerage told CBC News that prospective buyers remain cautious amid global economic uncertainty — a polite way of saying that when the world feels shaky and borrowing costs climb, the average family puts the house hunt on pause.

What it means for buyers and sellers this fall

So where does this leave you, practically speaking?

If you're selling, the message is blunt: overpriced listings are sitting. New listings fell in September partly because sellers read the room and decided to wait. The ones that did list got absorbed quietly. Price right, or don't bother.

If you're buying — especially with pre-approval in hand — this is one of those rare windows where the data is actually on your side. Fewer competing offers, more negotiating room, and prices trending down year over year. The catch, and it's a real one, is that the December rate decision could make today's fixed rates look like a bargain by January.

October 28 is the next date that matters. The Bank announces then, and every bond trader, bank economist, and mortgage broker in the country will be parsing the statement for a December signal. Until that picture clears, Cathcart's warning is the best summary of the Canadian market right now: buyers are back on the sidelines, waiting to see how much worse borrowing gets before it gets better.

A quick note: I could not find a verified YouTube video from a reputable Canadian outlet covering this CREA data release, so I have not embedded one. The source links below take you directly to the reporting.

Sources

• Reuters: Canadian home sales fall in September as mortgage rates increase, CREA says
• CREA Statistics: October 16, 2026 monthly housing market news release
• CBC News: Canadian Real Estate Association revises home sales forecast down again as sales fall in September
• Reuters: Canadian home sales fell in August as economic uncertainty grows (September data release)