Canadian Home Sales Show Signs of Recovery in May 2026

📅 6 days ago 🏷️ Canadian Real Estate Association

Home sales across Canada increased significantly in May 2026, with Ontario leading the charge, as the market begins to stabilize after a period of softness earlier in the year.

In a notable shift in the Canadian housing market, national home sales rose by 5.5% from April to May 2026, with Ontario playing a pivotal role in this uptick. Shaun Cathcart, Senior Economist at the Canadian Real Estate Association (CREA), commented on this trend, suggesting that the implementation of the HST rebate on new builds may have momentarily diverted buyer interest from the existing home market. Although this was the first month in 2026 to exhibit significant upward momentum in headline demand, the underlying conditions have been improving for some time, as evident from the alignment of sellers' and buyers' expectations. This is reflected in the tightening sale-to-list price ratios and the reduced time frames between property listings and sales. Consequently, home prices appear to have stabilized after experiencing some softness earlier in the year.
According to CREA's report, actual monthly activity in May 2026 was 5.1% lower than the same month in 2025, despite the month-over-month sales increase. The number of newly listed properties saw a slight decline of 1%, indicating a tightening supply situation. The MLS® Home Price Index (HPI) experienced a marginal decrease of 0.1% month-over-month and a larger year-over-year drop of 4.1%. However, the actual national average sale price was reported at $702,079, reflecting a year-over-year increase of 1.5%, marking the highest average price in two years and the first instance above the $700,000 threshold in 23 months.
The tightening of the sales-to-new listings ratio to 49.2% in May, up from 46.2% in April, suggests that the market is becoming more balanced. Historically, a ratio between 45% and 65% is indicative of balanced market conditions, with the long-term average set at 54.8%. Garry Bhaura, Chair of CREA, noted that while the spring market was seemingly delayed this year, the data from May indicates a significant pickup in activity, coinciding with the busy season typically occurring between May and June. Bhaura encouraged potential buyers and sellers who have been hesitant to make a move to engage with a REALTOR® in their area as market conditions appear favorable.
At the end of May 2026, there were over 200,000 properties listed for sale across all Canadian MLS® Systems, reflecting no change from the previous year but 2.8% lower than the long-term average for this period. The inventory level stood at 4.8 months nationally, a decrease from 5.1 months in previous months, which aligns closely with the long-term average of five months. A seller's market is characterized by inventory levels below 3.6 months, while levels above 6.4 months indicate a buyer's market.
The National Composite MLS® Home Price Index (HPI) showed a minimal decline of 0.1% month-over-month in May, marking the smallest decrease since January 2025, with a year-over-year decrease of 4.1%. Regionally, the price trends indicate declines in British Columbia, Alberta, and Ontario, which counterbalance gains in other provinces. The upcoming CREA statistics package is set for release on July 15, 2026, providing further insights into the evolving market landscape. CREA emphasizes that while average price information can help identify trends, it does not accurately reflect actual prices in areas with diverse neighborhoods or account for geographic price differentials.
As Canada's largest single-industry association, representing over 155,000 REALTORS® through 61 real estate boards and associations, CREA continues to monitor these developments closely. For further inquiries, Pierre Leduc from CREA's Media Relations can be reached directly.

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