Canada’s housing market may be turning a corner after a slow start to 2026, with new data indicating that buyer activity gained momentum in May despite sales remaining below last year’s levels.
According to the latest figures released by the Canadian Real Estate Association (CREA), a total of 47,014 homes were sold across the country in May, representing a 5.1 per cent decline compared to the same month last year. However, on a month-to-month basis, sales rose by 5.5 per cent compared to April, marking the first significant increase in market activity this year.
Industry observers view the increase as a sign that buyers and sellers are gradually adapting to changing market conditions after months of uncertainty driven by inflation concerns, trade tensions, and global economic instability.
CREA’s senior economist, Shaun Cathcart, said the improvement was evident across much of the country but was particularly strong in Ontario. He noted that market conditions have been quietly improving for several months, with buyers and sellers becoming more aligned on pricing expectations.
One indicator of this shift is the narrowing gap between asking prices and final selling prices. Homes are also spending less time on the market before selling, suggesting growing confidence among both buyers and sellers.
The national average selling price reached $702,079 in May, an increase of 1.5 per cent compared with a year earlier. It is the highest national average home price recorded in two years and marks the first time since 2024 that the average has surpassed the $700,000 threshold.
While average prices have edged higher, CREA’s Home Price Index, which measures the value of a typical home, remained relatively stable. The index slipped just 0.1 per cent from April and was down 4.1 per cent from a year ago, representing the smallest annual decline recorded so far in 2026.
Regional differences continue to shape the national market. Home prices remain lower than a year ago in provinces such as Ontario, Alberta, and British Columbia, while several other regions have posted modest gains.
Market experts say many buyers have remained cautious throughout the spring due to concerns about affordability and economic uncertainty. Nevertheless, confidence appears to be slowly returning.
In Edmonton, where housing demand has remained relatively resilient, local real estate professionals describe the market as steady rather than explosive. While activity has not matched the rapid pace seen last year, buyers are gradually re-entering the market as fears surrounding tariffs and economic instability ease.
Analysts from major financial institutions also see encouraging signs. Economists believe pent-up demand, combined with more realistic pricing by sellers, is helping to bring buyers back into the market. They suggest that the sharp price corrections seen in some regions may be nearing an end, particularly in the detached home segment.
Forecasts for the remainder of 2026 indicate that home sales are expected to continue improving gradually through the second half of the year. Economists anticipate modest price growth nationally, with stronger gains likely in markets outside Ontario where supply and demand conditions remain more balanced.
Meanwhile, new listings declined by one per cent in May compared with April, suggesting that inventory growth is slowing as more buyers begin returning to the market.
For prospective homebuyers, especially in Ontario and the Greater Toronto Area, the latest figures offer cautious optimism. While affordability challenges remain significant, the combination of stabilizing prices, improving sales activity, and growing market confidence suggests that Canada’s housing market may finally be moving toward a more balanced and sustainable recovery.