Canadian home sales cooled slightly in September yet still delivered the strongest September since 2021, a reminder that demand is edging back even as affordability remains strained.
The Canadian Real Estate Association said transactions fell 1.7% from August but were 5.2% higher than a year earlier.
The national MLS Home Price Index was essentially flat, down 0.1% month over month and 3.4% year over year.
CREA reported the non seasonally adjusted average sale price at $676,154, up 0.7% from September 2024.
The modest monthly pullback reflected weaker activity in Greater Vancouver, Calgary, Edmonton, Ottawa, and Montreal, which outweighed gains in the Greater Toronto Area and Winnipeg.
New listings edged down 0.8%, nudging the sales to new listings ratio to 50.7% from 51.2% in August. Active listings ended the month at 199,772.
Months of inventory held at 4.4 for a third straight month, the lowest since January and just under the five month long term average that CREA associates with balanced conditions.
“Activity was still running at the highest level for that month since 2021,” said Shaun Cathcart, CREA’s senior economist, in a press release, noting that pent up demand and more normal borrowing costs could support sales into late 2025 and 2026.
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The path of rate cuts is ultimately tied to the Bank of Canada inflation goal, and further progress there would help lower borrowing costs into 2026.
On the demand side, earlier wealth effects from rising assets, including Canadian household net worth, can support move up buying, while stretched affordability keeps many first time buyers on the sidelines.
Mismatch feeds a broader debate over how to unlock supply and reduce friction in approvals and taxes, where measures such as a housing GST rebate have produced mixed results.
The association now expects 473,093 sales in 2025, a 1.1% decline from 2024, before a rebound to 509,479 sales in 2026.
The national average price is projected to fall 1.4% in 2025 to $676,705 and then rise 3.2% to $698,622 in 2026. The forecast points to a market that is healing but still constrained by affordability and uneven provincial trends, particularly in British Columbia and Ontario.
Policymakers are still grappling with a housing crisis that will take sustained construction and infrastructure investment to ease, even if lower rates in 2026 provide some relief.
