Canadian Home Sales Experience Notable Surge in May 2026

📅 5 days ago 🏷️ Canadian Real Estate Association

The Canadian real estate market shows signs of recovery with a significant increase in home sales in May 2026, driven primarily by Ontario. Market conditions are improving, leading to price stabilization and a tightening sales-to-listing ratio.

In May 2026, the Canadian housing market witnessed a significant uptick in national home sales, which rose by 5.5% compared to the previous month. This increase was notably influenced by activity in Ontario, indicating that the recent HST rebate on new builds may have temporarily diverted buyers' attention from the existing home market. Shaun Cathcart, the Senior Economist at the Canadian Real Estate Association (CREA), highlighted that while this marked the first month of substantial demand growth in 2026, the underlying market conditions had been improving for some time. He noted that the expectations of both sellers and buyers are becoming increasingly aligned, as shown by the tightening sale-to-list price ratios and the reduction in time taken to sell properties. Following a period of price softness early in the year, home prices have largely stabilized.
May's statistics reveal that the actual (not seasonally adjusted) monthly activity was still down by 5.1% compared to May 2025, despite the month-over-month sales increase. The number of new listings saw a slight decrease of 1% from April to May, while the MLS® Home Price Index (HPI) experienced a marginal decline of 0.1% month-over-month and a more significant year-over-year drop of 4.1%. However, the national average sale price for homes rose by 1.5% from the previous year, reaching $702,079 in May 2026, marking the highest average price recorded in two years and the first time it surpassed the $700,000 threshold in 23 months.
The sales-to-new listings ratio tightened to 49.2% in May from 46.2% in April, indicating a shift towards a more balanced market. This ratio is a key indicator of market health, with long-term averages sitting at 54.8%. Garry Bhaura, the Chair of CREA, commented on the spring market's delayed activity, likening it to the weather patterns experienced across Canada this year. He suggested that the numbers from May demonstrate a clear increase in market activity, particularly as the transition from May into June typically represents the busiest period for real estate transactions.
At the end of May 2026, there were approximately 200,000 properties listed for sale across all Canadian MLS® Systems, which remained unchanged from the previous year and was 2.8% below the long-term average for that time of year. The inventory level stood at 4.8 months nationally, a slight decrease from 5.1 months observed earlier in the year, maintaining proximity to the average of five months. A seller’s market is characterized by inventory levels below 3.6 months, while a buyer’s market is indicated by levels above 6.4 months.
The National Composite MLS® HPI’s slight decline of 0.1% in May was the smallest since January 2025, showing signs of price stabilization that could encourage more buyers to enter the market. The report also noted that while prices in British Columbia, Alberta, and Ontario have dropped on a year-over-year basis, gains have been observed in other provinces. With the upcoming CREA statistics package set to be released on July 15, 2026, the association continues to monitor these trends closely, emphasizing that average price data can help illustrate long-term trends but may not reflect the actual prices in diverse local markets. CREA, representing over 155,000 REALTORS® across Canada, remains a significant voice in the real estate landscape.

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