Market Insight for February 20

Canadian home sales started 2026 on a colder note, with activity dampened by severe winter weather across parts of the country.

The month-over-month drop in national home sales was largely concentrated in the Greater Golden Horseshoe and Southwestern Ontario, indicating that the slowdown was “likely tied more to a historic winter storm than to weakening demand,” said Shaun Cathcart, CREA’s Senior Economist. Even with the quieter beginning, Cathcart added that 2026 is still anticipated to be influenced by pent-up demand from first-time buyers.

According to new data released Tuesday by the Canadian Real Estate Association (CREA), home sales recorded over Canadian MLS® Systems fell 5.8% month-over-month in January. Actual sales were also 16.2% lower than in January 2025.

While sales cooled, new supply moved in the opposite direction. Newly listed properties jumped 7.3% month-over-month, mirroring a similar early-year surge seen in January 2025. The increase was led by markets including Montreal, Quebec City, Calgary, Greater Vancouver, and Victoria, while Central and Southwestern Ontario saw weaker listing activity, further underscoring the role weather played in suppressing market movement.

Inventory levels also edged higher: there were 4.9 months of inventory nationally at the end of January, up from 4.6 months in December, but still just below the long-term average of five months.

Prices remain lower compared to last year in British Columbia, Alberta, and Ontario, offsetting gains elsewhere. The national average home price came in at $652,941 in January, down 2.6% from a year earlier.

Last month, the Bank of Canada held its key policy rate at 2.25 per cent. So now buyers have some fixed costs they can plan around.

It’s just a matter of time getting the buyers out there. They wanted the inventory; they wanted the stabilized rates. So, everything the buyers wanted is there. But where are the buyers?” This could be the year when first-time buyers re-enter the market in a meaningful way after being shut out for years, now that rates are favourable.

CREA said there were 140,680 properties listed for sale on all Canadian MLS systems at the end of January, up 4.5 per cent from a year earlier but 11.4 per cent below the long-term average for that time of year.

BMO senior economist Robert Kavcic said the true test of the extent of the market rebound will come this spring.

“Many talk about pent-up demand given the lack of sales volume in 2025, but there’s probably also a significant amount of pent-up supply in the form of listings that were sitting and ultimately pulled after not selling,” he said in a research note.

“We’ll have a better indication when the market thaws out in early spring, but expect any pent-up demand to be at least equally met by pent-up listings.”

Fresh listings in the Toronto real estate market have been trickling out slowly in February as successive blasts of winter made moving around the city a challenge.

Sellers who want to attract a crowd of house hunters tend to hold off until the mounds of snow on narrow side streets diminish.

But that scarce supply has worked in favour of some homeowners who set an attention-grabbing asking price and a date for reviewing offers. In some cases, homes listed with an asking price of $999,000 have sold for prices in the $1.2-million and $1.3-million range.

Sellers, this is your moment. Buyers are active, motivated, and eagerly waiting for fresh new listings to hit the market.