Canada’s housing market showed signs of renewed momentum in May, with national home sales rising 5.5% from April, according to the Canadian Real Estate Association (CREA).
The gain marked the first meaningful monthly increase in headline demand so far this year, though activity remained 5.1% below May 2025 levels. That suggests the market is improving from a weak start rather than entering a full rebound.
CREA said the sales increase was broad-based but driven disproportionately by Ontario, where activity had been particularly soft earlier in the year.
"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,” said CREA Senior Economist Shaun Cathcart. He said buyers’ and sellers’ expectations are becoming more aligned, with sale-to-list price ratios tightening and properties spending less time on the market.
TD Economist Rishi Sondhi said the May increase leaves sales "on track for a firm increase in Q2” and adds a tailwind to the residential component of GDP. However, he cautioned that the gain is still only a partial recovery from an "exceedingly weak, weather-impacted first quarter.”
Supply tightens as prices stabilize
New listings edged down 1% in May. With sales rising and new supply easing, the national sales-to-new listings ratio tightened to 49.2%, up from 46.2% in April. That remains below the long-term average of 54.8%, but within the range CREA generally associates with balanced market conditions.
There were just over 200,000 properties listed for sale at the end of May, unchanged from a year earlier. Months of inventory fell to 4.8, down from 5.1 in February, March and April, leaving the national market close to its long-term average.
Prices also showed further signs of stabilizing. The National Composite MLS® Home Price Index slipped 0.1% month-over-month and was down 4.1% from a year earlier, the smallest annual decline so far in 2026.
BMO Senior Economist Robert Kavcic said the "floor under Canada’s hardest-hit housing markets might be firming,” though he added that a stronger rebound is still unlikely. He said the market appears to be entering a phase where pent-up demand and lower prices are bringing more transactions back, particularly for single-family homes.
"A return to firm price growth is still some time off, and the condo market is a different, weaker, animal altogether,” Kavcic wrote.
The national average sale price was $702,079 in May, up 1.5% from a year earlier. CREA said it was the highest monthly national average price in two years and the first time the measure has topped $700,000 in 23 months.
May 2026 snapshot:
- Home sales: +5.5% month-over-month
- Year-over-year sales: -5.1%
- New listings: -1.0% month-over-month
- Sales-to-new listings ratio: 49.2%
- MLS HPI: -0.1% month-over-month, -4.1% year-over-year
- Average price: $702,079, up 1.5% year-over-year
- Months of inventory: 4.8