Canada’s housing market delivered some encouraging signals in May 2026, with home sales picking up pace and prices showing their strongest stability in over a year, according to the latest report from the Canadian Real Estate Association (CREA). While the market is not yet back to balanced conditions across the board, the latest data points to a gradual shift with real implications for buyers and sellers alike.

Home Sales Climb as New Listings Pull Back

Home sales recorded over Canadian MLS Systems rose 5.5% on a month-over-month basis in May 2026, a notable jump that points to renewed buyer activity. At the same time, new listings fell back by 1% over the same period.

The combination of rising sales and fewer new listings tightened the national sales-to-new listings ratio to 49.2%, up from 46.2% in April. For context, the long-term average for this ratio sits at 54.8%, with readings between roughly 45 and 65% generally considered consistent with a balanced housing market. May’s reading places the national market squarely within that balanced range, even as it remains on the softer end.

“The national sales increase from April to May was broad-based but driven disproportionately by Ontario, suggesting the HST rebate on new builds may have only briefly drawn the attention of buyers away from the existing home market,” said Shaun Cathcart, CREA’s Senior Economist, in the report. “While it was just the first month in 2026 to see any meaningful upward momentum in headline demand, under the surface conditions have been improving for some time. Sellers’ and buyers’ expectations are increasingly aligned, as evidenced by tightening sale-to-list price ratios and shorter periods between listing and sale dates. As a result, prices have largely stabilized following some softness earlier in the year.”

Inventory Levels Hold Steady

At the end of May 2026, just over 200,000 properties were listed for sale across Canadian MLS Systems on a non-seasonally adjusted basis. That figure is unchanged from a year earlier, though it remains 2.8% below the long-term average for this time of year.

Months of inventory — a key measure of how long it would take to sell off current supply at the present sales pace — fell to 4.8 months nationally, down from 5.1 months in February, March, and April. This brings the market very close to its long-term average of five months. 

Home Prices Show Signs of Stabilizing

The National Composite MLS Home Price Index edged down just 0.1% on a month-over-month basis in May. Aside from April, this marks the smallest monthly decline recorded since January 2025 — a meaningful signal that price softening may be running its course.

This stabilization trend lines up with other market indicators. Sale-to-list price ratios have been tightening, and days on market have been edging lower in recent months, both pointing toward firmer demand. Price stabilization is widely viewed as a critical precondition for buyers who have been sitting on the sidelines to begin re-entering the market in greater numbers.

On a year-over-year basis, the non-seasonally adjusted National Composite MLS HPI was down 4.1% compared to May 2025. That represents the smallest annual decline recorded so far in 2026, reinforcing the broader narrative of a market finding its footing.

Regionally, the picture remains mixed. Prices are still down year-over-year in British Columbia, Alberta, and Ontario, though these declines are being offset by price gains in other provinces across the country.

National Average Home Price Tops $700,000

The non-seasonally adjusted national average home price reached $702,079 in May 2026, up 1.5% from the same month last year. This marks the highest monthly national average home price recorded in two years, and the first time the average has surpassed the $700,000 threshold in 23 months.

“Like the weather in many parts of Canada this year, the spring market appears to have been delayed by a month or so, but the May numbers left little doubt that activity is now picking up,” said Garry Bhaura, CREA Chair, in the report. “The handoff from May into June is typically the busiest time of the year, so we now have a strengthening market happening at the most active time of the year.”

What This Means Going Forward

Taken together, May’s data paints a picture of a housing market in transition. Sales activity is picking up, price declines are losing momentum, and the national average price has reached a two-year high. While regional differences remain, particularly in British Columbia, Alberta, and Ontario, where prices are still under year-over-year pressure, the overall trend suggests the market is moving toward firmer ground.

Frequently Asked Questions

Is the Canadian housing market balanced right now? At a national level, yes. With 4.8 months of inventory and a sales-to-new listings ratio of 49.2%, the market falls within the range generally considered balanced, though conditions vary by region.

Are home prices going up or down in Canada? Prices are stabilizing. The National Composite MLS HPI was down just 0.1% month-over-month in May 2026, while the national average home price rose 1.5% year-over-year to $702,079.

Which provinces still have falling home prices? British Columbia, Alberta, and Ontario continue to see year-over-year price declines, while other provinces are recording gains.

What does months of inventory tell buyers and sellers? It estimates how long current listings would take to sell at the existing sales pace. Below 3.6 months typically signals a seller’s market, while above 6.4 months points to a buyer’s market. At 4.8 months, Canada’s market sits close to its long-term balance.