Home buyers across Canada took a bit of a break in September, as sales dropped 2.3% from sales in August, the first month-over-month decline since May, according to the latest report from the Canadian Real Estate Association (CREA). “After a four-month run of modestly positive progress on demand, supply, and prices, many of Canada’s housing markets took a step back in September,” said Shaun Cathcart, CREA’s senior economist. “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.” “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?” added Cathcart. “Until that becomes clearer, this fresh round of uncertainty will likely send some buyers back to the sidelines.” New listings also slumped in September, falling 1.8% from August as sellers also took a break. Overall, new supply has generally been declining since early 2025, said CREA Chair, Garry Bhaura. .“In a repeat of what we saw earlier this year when the start of the spring market coincided with a jump in mortgage rates, the start of the fall market has likewise been met with an even larger jump in fixed rates,” said Bhaura. “While that makes the task harder for prospective home buyers as it relates to a mortgage, it will also likely mean more homes to choose from and more negotiating power. For sellers, a well thought out pricing strategy will become even more important.” With the decline in sales, new listings and overall supply the national sales-to-new listings ratio slowed slightly to 48.8%, down from 49.1% in August. “The long-term average for the national sales-to-new listings ratio is 54.7%, with readings roughly between 45% and 65% generally consistent with balanced housing market conditions,” said Cathcart, adding “slightly more than 200,000 properties were listed for sale on all Canadian MLS Systems at the end of September, up 1.8% from the same time last year and a little above the long-term average. The big picture is that overall supply has held steady at historical average levels since spring 2025.” Available inventory totalled 4.9 months of supply, up only slightly from the summer, but basically in line with the long-term average for the measure. According to CREA, based on one standard deviation above and below that long-term average, a seller’s market would be below 3.6 months, and a buyer’s market would be above 6.4 months. .“With September came a small 0.4% drop in the national composite home price index from August following four months of stable prices reflecting a fresh step down for prices in Ontario where demand softened in September, alongside the ongoing moderation of offsetting price gains on the Prairies, in Quebec, and on the East Coast,” said Cathcart. The non-seasonally adjusted national average home price was $666,538 in September, down 1.6% from September last year.
