Canadian Home Sales Slip Amid Rate Hike Fears

The Canadian housing market may be facing a slowdown as home sales slipped in August for the first time since spring. According to the Canadian Real Estate Association (CREA), national sales through MLS systems declined by 0.7% on a seasonally adjusted month-over-month basis last month, while actual unadjusted activity came in 6.9% below the same month last year.

The decline in sales is attributed to rising inflation risks and the renewed prospect of a Bank of Canada rate hike, which may cut short a tentative housing market recovery. National transactions remain roughly 12% below the decade-long average, underscoring how much ground still needs to be recovered despite four straight months of gains in Canada's housing market.

New listings across Canadian MLS systems rose 3.3% month over month, reversing three consecutive monthly declines and reflecting what CREA chair Garry Bhaura described as sellers moving early to capture the fall market. However, this fresh round of incoming headwinds is expected to dampen the prospects for further housing market momentum heading into 2027.

CREA had already revised its 2026 sales forecast lower in July and is now projecting 463,336 properties to change hands through Multiple Listing Service (MLS) Systems. The national average home price is forecast to rise 1.1% this year to $686,710, roughly $2,000 below CREA's spring projection.