CANADA HOUSING MARKET: EXISTING HOME SALES SIGNIFICANTLY INCREASED IN MAY. IS A RECOVERY IN SIGHT?
SUMMARY
National housing (unit) sales increased sharply from April to May, with this rise largely shared across local markets we monitor. This rise in national sales, combined with a decline in new listings, modestly pushed up the sales-to-new listings ratio, reflecting some tightening in market conditions. The MLS House Price Index continued to edge down in May.
After having declined by nearly 11% (sa figures) from November 2025 to March 2026, national housing sales have since recovered more than half of this decline with increases in April and May. In this latter month, national sales posted a 5.5% (sa) monthly rise, the strongest since October 2024. Most local markets we track contributed to this monthly rise in national sales with the largest increases observed for Sudbury (40.7%), Guelph (21.5%), Brantford (20.9%) and Halifax (17.4%). However, national sales declined by 5.1% (nsa) over the 12-month period ending with May, again with most monitored local markets contributing to this national outcome. Largest sales declines were posted in Thunder Bay (-29.6%), St. John’s (NL; -20.2%), Moncton (-19.8%) and Charlottetown (-19.3%).
From April to May, national new listings declined by 1% (sa), essentially continuing their modest downward trend that started in September 2025. From May 2025 to same month in 2026, national new listings declined 7.9% (nsa) with most local markets we track contributing to this national annual decline.
With the rise in sales and the decline in new listings from April to May, the national sales-to-new listings ratio rose from 46.2 to 49.2% (sa). And this indicator also edged up 2.2 percentage points (sa) from the same month in 2025. This performance suggests a tightening in market conditions over these periods, but this ratio has been hovering in the lower half of the balanced conditions range—hence close to buyers’ favourable zone—since March of 2024, and indeed for most of the period since Spring of 2022.
The other indicator of market conditions we track, months of inventory, also tightened from April to May, declining from 5.1 to 4.8 months (sa) and is below its estimated pre-pandemic long-term average (of 5.2 months). This indicator of market conditions was nevertheless unchanged since its May 2025 level. For several quarters now, this indicator has been below its pre-pandemic average in all provinces except in British Columbia and Ontario, where it was above their respective average. But these 2 provinces have nevertheless witnessed tightening—i.e. decline—in their months of inventory since May of 2025, and this tightening is also reflected by the observed rise in their sales-to-new listings ratio over this 12-month period.
The national (all markets) MLS House Price Index continued its trend decline in May, edging down 0.1% (sa) from its April level. This monthly decline was largely due to a decline in this house price index for apartments (-0.7%) and townhouses (-0.2%). The MLS HPI for 1-storey units edged up 0.1% from April to May and was stable for 2-storey units. Compared to its level in the same month of 2025, the MLS HPI was 4.1% (nsa) weaker in May 2026, with all unit types contributing to this annual decline with the largest ones observed for apartments (-6.7%) and townhouses (-5.2%).
IMPLICATIONS
National sales increased for a second consecutive month in May, which is of course welcomed news, and in line with our expectations of some pick-up in housing demand as ongoing economic uncertainty related to global trade tensions start fading. But as stated in our last monthly report, we must witness a sustained upward trend in housing demand and tightening in market conditions before we can see a recovery in the national house price, and especially in Ontario and B.C. markets given their influence on national figures. Housing demand in recent years has been weakened by first the rise in mortgage rates on the heels of the tightening cycle for monetary policy from early-2022 to mid-2023, and second by the increase in global trade frictions and resulting economic uncertainty triggered by the U.S. administration since shortly after the November 2024 election. Housing market conditions were further softened by the robust performance of housing starts in recent years, including the sharp rise in recently completed and unabsorbed housing units, which provided additional supply options to potential buyers.
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