The Canadian Real Estate Association (CREA) reported yesterday that national home sales declined for the first time in five months in August. Risks that inflation could move higher and the potential for higher interest rates weighed on potential buyers in August. Home sales activity had been steady over the last few months, but fresh trade tensions with the US could weigh on consumer confidence and demand. Meanwhile, the Canada Mortgage and Housing Corporation (CMHC) says the Canadian economy needs millions of homes built by 2036 to restore pre-COVID affordability.

• Sales of existing homes in Canada fell by 0.7% in August from the previous month. Compared to one year ago, home sales declined by 6.9%.
• While sales cooled off, prices held up. Home sales totalled 37,749 units in August. The national average sale price was $692,425, up a modest 0.6% from a year earlier.
• New listings rose by 3.3% month-over-month, ending three straight monthly declines and giving buyers a bit more choice.
• CREA economists flagged a tougher backdrop for housing ahead. CREA’s senior economist Shaun Cathcart said rising inflation risks and the possibility of looming Bank of Canada rate hikes have weakened the economic environment, which could weigh on sales activity going forward.
• In CMHC’s Fall 2026 Housing Supply Report, which was released last week, said Canada needs up to 4.7 million new homes by 2036 to restore pre-pandemic affordability, which is roughly double the current pace of construction.

CREA’s report shows a housing market losing a bit of momentum in the near term, even as the bigger structural challenge, not enough homes being built, persists in the background. Real estate activity had shown signs of improvement in 2026, but fresh trade tensions and tight financial conditions amid the conflict in the Middle East weigh on the outlook for the remainder of 2026.

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