Canada’s housing market took a step back in September, with national home sales, new listings and prices all edging lower, according to the latest report from the Canadian Real Estate Association (CREA). The pullback ends a four-month run of modestly positive progress and follows a fresh jump in fixed mortgage rates at the start of the fall market.

Sales and new listings both declined

The number of homes sold over Canadian MLS® Systems decreased 2.3% from August to September.

New listings fell 1.8% month over month, resuming their downward trend after a rebound in August. Overall, new supply has generally been declining since early 2025. With the drop in sales only slightly outpacing the decline in new supply, the national sales-to-new-listings ratio eased to 48.8% in September from 49.1% in August. The long-term average for the measure is 54.7%, and readings roughly between 45% and 65% are generally consistent with balanced housing market conditions.

“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. 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,” said Shaun Cathcart, CREA’s senior economist, in the report. “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? Until that becomes clearer, this fresh round of uncertainty will likely send some buyers back to the sidelines.”

Inventory held near historical norms

There were slightly more than 200,000 properties listed for sale across Canadian MLS® Systems at the end of September, a little above the long-term average and 1.8% above the same point last year. Overall supply has held steady at historical average levels since spring 2025.

Nationally, there were 4.9 months of inventory at the end of September, up slightly from the summer and in line with the long-term average of five months. Based on one standard deviation above and below that average, a seller’s market would be below 3.6 months of inventory, while a buyer’s market would be above 6.4 months.

“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 Garry Bhaura, CREA Chair, in the report. “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.”

Home prices edged lower after four stable months

The National Composite MLS® Home Price Index (HPI) decreased 0.4% from August to September. The decline followed four months of stable prices and reflected a fresh step down in Ontario, where demand softened in September, alongside the continued moderation of offsetting price gains on the Prairies, in Quebec and on the East Coast.

On a year-over-year basis, the non-seasonally adjusted index was down 3.4% compared to September 2025. It marked the first time since January that the annual decline has grown larger.

The non-seasonally adjusted national average home price was $666,538 in September 2026, down 1.6% from the same month last year.