**Title: Home Sales in Canada Decline in September, CREA Reports**

Home sales in Canada experienced a decline in September, marking the first month-over-month drop since March. According to data released by the Canadian Real Estate Association (CREA) on October 16, sales fell by 1.7 percent compared to August. Despite this decrease, September recorded the highest number of sales for that month since 2021.

The decline in sales was primarily attributed to reduced activity in major markets such as Greater Vancouver, Calgary, Edmonton, Ottawa, and Montreal. These decreases outweighed minor gains seen in the Greater Toronto Area and Winnipeg. Shaun Cathcart, CREA’s senior economist, noted that while sales dipped, they remained “relatively unchanged” and similar to August’s figures. He described the situation as “not a trend yet, maybe a bit of a bump in the road.”

Cathcart suggested that the impact of a mid-month interest rate cut by the Bank of Canada might not have been fully felt in September, potentially leading to increased activity in October. He recalled that last year, October surprised many with a surge in homebuying activity.

Desjardins economist Kari Norman echoed this sentiment, stating that the recent 25 basis point cut in the policy rate to 2.50 percent had a limited effect on home sales due to its timing. Norman does not foresee a wave of forced home sales from mortgage renewals at higher rates, although she acknowledged that this could vary by region.

Despite the monthly decline, CREA highlighted that the overall supply of homes increased by 7.5 percent year-over-year, with 199,772 properties listed for sale at the end of September. This increase is one of the smallest seen in a long time. Newly listed properties saw a slight decrease of 0.8 percent compared to the previous month. The sales-to-new-listings ratio eased to 50.7 percent from 51.2 percent in August.

Valérie Paquin, CREA chair, remarked that while there are more buyers in the market than at almost any point in the last four years, sales activity remains below average and significantly lower than long-term trends. She expressed optimism that the market would continue to improve moving forward.

Looking ahead, CREA has updated its resale housing forecasts for 2025 and 2026. Cathcart indicated that if sales continue to rise while supply decreases, the market could experience tighter conditions by early next year. He noted that the anticipated recovery, which was delayed earlier this year due to tariffs and economic uncertainty, appears to be underway.

CREA now projects that national home sales will rebound by 7.7 percent to 509,479 in 2026, the highest level since 2021, although still below the peak and slightly under the 10-year average. Cathcart emphasized that with three years of pent-up demand and more normalized interest rates, there is a forecast for continued upward momentum in home sales through the end of this year and into 2026.

In addition, the Canada Mortgage and Housing Corporation reported a 14 percent increase in housing starts in September, with a total of 279,234 units compared to 244,543 in August. Tania Bourassa-Ochoa, CMHC’s deputy chief economist, noted that Montréal and Toronto accounted for over a quarter of the total monthly starts, primarily due to increased rental apartment construction. However, she cautioned that current housing start levels reflect decisions made during a time of higher investor confidence.