Canadian Home Sales Experience Slight Decline in August Amid Economic Uncertainty

📅 5 days ago 🏷️ Canadian Real Estate Association

Home sales in Canada dipped by 0.7% in August 2026, reflecting a stable yet challenging market environment influenced by rising inflation and fluctuating mortgage rates.

In August 2026, Canada’s housing market saw a slight downturn as sales activity remained largely unchanged for the fourth consecutive month. Shaun Cathcart, Senior Economist at the Canadian Real Estate Association (CREA), noted that while sales figures have not drastically shifted, the broader economic landscape has become more complex. The Bank of Canada has issued warnings regarding rising inflation risks and has expressed concerns about the sustainability of recent economic growth. These factors have led to an increase in fixed mortgage rates, driven by higher bond yields. On the variable rate side, the possibility of a rate hike is back on the table for this year and has already been factored into market expectations. Such economic headwinds are anticipated to inhibit any further momentum in the housing market as it approaches 2027.
The data for August presents a mixed picture. National home sales decreased by 0.7% month-over-month, and the actual sales activity was 6.9% lower compared to August 2025. However, the number of newly listed properties saw a rebound of 3.3% month-over-month, reversing a trend of three consecutive declines earlier in the summer. The MLS® Home Price Index (HPI) remained unchanged from the previous month but reflected a 3% decline year-over-year. Interestingly, the actual national average sale price rose by 0.6% compared to August of the previous year, standing at $668,219.
Garry Bhaura, the Chair of CREA, commented on the situation, highlighting that the increase in new listings was widespread across major markets and particularly noticeable towards the end of the month. This trend suggests that sellers are eager to capitalize on the fall market, especially considering the late timing of Labour Day this year. For potential buyers, this influx of new properties offers more choices but also introduces the challenge of navigating a market filled with economic uncertainty.
The uptick in new listings, alongside a slight decline in sales, resulted in a decrease in the national sales-to-new listings ratio, which fell to 49.1% from 51.1% in July. This figure is below the long-term average of 54.7%, indicating a shift towards a more balanced market. At the end of August, there were just under 200,000 properties available for sale across all Canadian MLS® Systems, aligning with historical averages for this time of year and representing a mere 1.4% increase from the previous year.
Overall inventory levels have remained relatively stable since spring 2025, with 4.8 months of inventory recorded nationally—a figure that has not changed for four months and is slightly below the long-term average of five months. According to CREA, a seller’s market is characterized by inventory levels below 3.6 months, while a buyer’s market is indicated by levels exceeding 6.4 months.
The National Composite MLS® Home Price Index has shown remarkable stability, remaining unchanged from July to August. This stability marks the longest stretch of month-to-month price consistency since 2024. Year-over-year price declines have been decreasing since January, and the August 2026 figures indicate the smallest drop since October 2025.
The next set of CREA statistics is scheduled for release on October 16, 2026. CREA emphasizes that the average price data can help establish trends over time but does not necessarily reflect actual prices across diverse neighborhoods. The association, representing over 155,000 REALTORS® through 61 real estate boards and associations, provides these insights to help understand the dynamics of the Canadian housing market better.

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