A for sale sign is displayed outside a home in Toronto, Ontario in Toronto, Ontario, Canada December 13, 2021. REUTERS/Carlos Osorio/File Photo

By Fergal Smith

TORONTO (Reuters) -Canadian home sales fell 1.7% in September from August, ending a string of increases that began in April, data from the Canadian Real Estate Association showed on Thursday.

Sales activity declined in the regions of Greater Vancouver, Calgary, Edmonton, Ottawa and Montreal, which more than offset gains in the Greater Toronto area and Winnipeg, CREA said.

On an annual basis, without seasonal adjustment, sales were up 5.2%.

“While the trend of rising sales that began earlier this year took a breather in September, activity was still running at the highest level for that month since 2021," Shaun Cathcart, CREA's senior economist, said in a statement.

“With three years of pent-up demand still out there and more normal interest rates finally here, the forecast continues to be for further upward momentum in home sales over the final quarter of the year and into 2026.”

The Bank of Canada last month lowered its benchmark interest rate to a three-year low of 2.5%.

The industry group's Home Price Index edged 0.1% lower on the month, while the seasonally unadjusted HPI was down 3.4% annually.

In updated forecasts, CREA projected sales to decline 1.1% this year from 2024, before rebounding 7.7% in 2026. The average price was forecast to decline 1.4% on an annual basis in 2025 before rising 3.2% next year.

(Reporting by Fergal Smith in TorontoEditing by Matthew Lewis)