Economic Uncertainty Weighs on August Home Sales

Canadian home sales slid 0.7 per cent in August from July.

Following increases of less than one per cent in the two preceding months, sales activity has remained largely unchanged since May.

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.

“For borrowers, fixed mortgage rates have already increased on higher bond yields. Meanwhile, on the variable rate side, a rate hike is not only back on the table for this year but already priced in by markets,” says Shaun Cathcart, senior economist with the Canadian Real Estate Association (CREA). “This fresh round of incoming headwinds is expected to dampen the prospects for further housing market momentum heading into 2027.”

Likes home sales, prices were relatively unchanged from July. They have remained largely consistent month-to-month since the spring, marking the longest period of price stability since 2024, when prices were flat throughout the year.

The national average home price was $668,219 in August, up 0.6 per cent from the same month last year.

New listings rebounded by 3.3 per cent from July, reversing three straight months of declines.

The noticeable increase in new supply in August was broad-based across all the largest markets and most apparent toward the end of the month.

“This suggests sellers were looking to get an early start to the fall market, particularly given how late Labour Day was this year,” says CREA chair Garry Bhaura. “For buyers, it will mean the usual seasonal burst of new properties to choose from, but at the same time they also have to contend with a fresh round of economic uncertainty.”

The increase in new supply, combined with the small decline in sales in August, caused the national sales-to-new listings ratio to ease to 49.1 per cent, down from 51.1 per cent in July.

There were just under 200,000 properties listed for sale on all Canadian MLS systems at the end of August, in line with the historical average for that time of the year and just 1.4 per cent above the year-earlier level.

Overall, supply has remained largely the same since spring 2025.