Canadian home sales edged down 0.7 per cent in August from July and were 6.9 per cent lower than a year earlier, the Canadian Real Estate Association (CREA) said Sept. 15, as fresh inflation worries pushed the possibility of a Bank of Canada rate increase back into the conversation for buyers.
The national average sale price was $668,219 in August, up 0.6 per cent from a year earlier on a non-seasonally adjusted basis, CREA reported. The MLS Home Price Index was unchanged from July and down 3 per cent year over year. New listings rose 3.3 per cent from July.
“Sales activity and price trends were largely unchanged for a fourth consecutive month in August,” CREA senior economist Shaun Cathcart said. “What has changed is the broader economic environment, with the Bank of Canada recently warning of rising inflation risks, along with doubts about the durability of recent economic growth.”
CREA chair Garry Bhaura pointed to supply as the month’s notable shift. “The noticeable increase in new supply in August was both broad based across all the largest markets and most apparent towards the end of the month,” he said. More listings meeting softer sales is the combination that typically gives buyers more room to negotiate, though price measures have not yet moved decisively.
The Bank of Canada held its policy rate at 2.25 per cent on Sept. 2, the seventh consecutive hold since October 2025. The central bank said the balance of risks had shifted, with upside inflation risk increasing and growth prospects becoming less certain. Headline consumer price inflation reached 3 per cent in July, at the top of the Bank’s target range, while core measures averaged around 2 per cent, according to a summary of the decision published by mortgage broker nesto. The Bank’s next decision, on Oct. 28, will come with a new Monetary Policy Report. Money markets are pricing possible increases beginning in late 2026 or early 2027, with forecasters divided on timing rather than direction, nesto reported.
On the supply side, Canada Mortgage and Housing Corporation (CMHC) said the seasonally adjusted annual rate of housing starts was 229,046 units in August, essentially flat from 229,360 in July. The six-month moving average fell 1.3 per cent to 244,149 units. Urban starts in centres with populations of 10,000 or more totalled 17,691 units in August, compared with 18,112 a year earlier, a decline of about 2 per cent. Rural starts ran at an annual pace of 11,224 units.
“Housing starts continued to trend slightly down in August, as modest gains in Quebec and Alberta only partially offset the decline in other provinces, most notably, Ontario,” said Kevin Hughes, CMHC’s deputy chief economist. By six-month trend, CMHC reported Toronto starts were flat, while Vancouver and Montreal each rose 6 per cent, Vancouver on stronger multi-unit starts.
Taken together, the three data points describe a market in a holding pattern. Sales and prices have barely moved for four months, construction is drifting lower rather than collapsing, and the central bank’s next move is now more likely to be up than down. For prospective buyers, the practical question is whether to lock in financing before the Oct. 28 announcement or wait to see whether growing inventory brings prices lower. Neither CREA nor CMHC forecast a direction in these releases, and mortgage rates are set by lenders rather than directly by the policy rate, so borrowers should confirm current offers with their own lender or broker.
Sources: CREA national statistics release, Sept. 15, 2026 (stats.crea.ca); CMHC, Housing starts and construction data for August 2026; Bank of Canada decision of Sept. 2, 2026, as summarized by nesto.ca.
