Canadian Housing Market Update — September 2026: Limping Into Fall

August 2026 provided another “it depends how you look at it” moment for Canadian home sales.

While the headline numbers — a 0.7% monthly dip in home sales; a year-over-year decline of 6.9% — say sales are slipping overall, more than half of provincial markets notched monthly gains in August, including inventory-starved regions like Saskatchewan and Manitoba.

While those sales increases were mostly modest, demand persists. But so do the hurdles home buyers are facing, which is why we might see home sales taper off further in September and dry up as the year draws to a close.

In addition to persistently high gas and food prices, buyers now have to grapple with a volatile mortgage market. The week of September 18 saw fixed mortgage rates rise by five to 25 basis points at most lenders, while analysts are predicting that multiple overnight rate hikes from the Bank of Canada will soon drive up variable mortgage rates.

Buyers wanting the stability of a fixed rate may not qualify for one now that rates are well over 4% at most lenders. Those who can’t afford a fixed rate may not have the stomach, or the financial breathing room, to go variable and risk multiple rate hikes.

There’s also the little matter of Canada’s increasingly ugly trade war with the U.S.: Donald Trump has threatened Canada with 50% tariffs on automobiles and steel, which are scheduled to be enacted on January 1, 2027. These particular tariffs could hit workers in Ontario and Quebec especially hard, and lead many to delay major purchases.

So even though August’s overall performance wasn’t exactly stunning, it could be a while before we see a better one.

Housing market winners and losers in August

We may be stretching the definition of “winners” a bit this month. Six provincial markets notched monthly sales gains in August, but the increases were fairly paltry in most cases:

Sales improved by fewer than 20 transactions in PEI, Manitoba, Nova Scotia and Quebec. That’s not exactly a sign of momentum. These provinces are limping into the fall market.

The gains in Saskatchewan and B.C. are a little more notable.

Buyers in Saskatchewan are facing record high prices and severely depleted inventory, factors that typically hamper sales. The desire to own a home remains strong in the province, which could remain one of the country’s few housing bright spots this fall thanks to its affordability advantage.

August was just the third month this year that B.C. posted a monthly increase in sales, which isn’t surprising since properties in much of the province remain painfully expensive. For the “Canadian market” to recover, it needs sales to rebound in B.C. For B.C. to rebound, it probably needs prices to fall a lot further.

This month’s provincial loser list is made up of:

The most significant development here is the reversal of fortunes seen in Ontario, where the housing market appeared to be bouncing off its bottom in the spring and early summer. But interest rate volatility and Trump’s latest tariff tirade may already be stifling demand in the province.

Canadian home prices in August

Here’s how prices behaved in some of Canada’s biggest housing markets last month.

All percentages indicate year-over-year changes in the MLS Home Price Index benchmark price, the Canadian Real Estate Association’s preferred home price metric.