After a slow start to 2026, Canada’s housing market appears to be gaining momentum heading into the summer months.

National home sales increased significantly in May, marking the strongest monthly improvement of the year. Lower borrowing costs, improved affordability, and greater certainty around pricing are encouraging buyers to re-enter the market.

More Balance Between Buyers and Sellers

One of the biggest changes we’re seeing is a return to balanced market conditions.

New listings were slightly lower in May, while the total number of homes available for sale remains close to historical averages. This has helped stabilize supply and demand across much of the country.

Although some areas of Ontario and British Columbia continue to face challenges—particularly in the condominium market—overall conditions are becoming healthier and more sustainable.

Home Prices Are Stabilizing

After several months of price adjustments, home values are beginning to level off.

The national Home Price Index declined by just 0.1% in May, the smallest monthly drop since late 2025. Year-over-year prices remain lower than last year, but the pace of decline is slowing considerably.

For buyers, this means there are still opportunities available. For sellers, it suggests that the worst of the price corrections may be behind us.

What This Means for Borrowers

Many buyers have been waiting on the sidelines over the past two years due to higher interest rates and affordability concerns. As rates stabilize and confidence returns, that pent-up demand could begin driving more activity through the second half of 2026.

Single-family homes continue to see the strongest demand, while the condo market is taking longer to recover due to higher carrying costs and softer rental conditions.

Looking Ahead

The Bank of Canada’s next rate announcement is scheduled for July 15. Inflation data and employment reports released over the next several weeks will play an important role in determining whether rates remain unchanged or if policymakers shift their outlook.

For now, most economists expect the Bank of Canada to remain on hold while monitoring economic conditions.

Bottom Line

The Canadian housing market is showing encouraging signs of recovery. Sales are increasing, inventory remains balanced, and price declines are moderating.

For buyers, improved affordability and greater selection continue to create opportunities. For homeowners approaching renewal, it’s an excellent time to review your mortgage strategy and ensure you’re positioned properly for the changing market.

If you’d like to discuss your mortgage options, renewal strategy, or purchasing plans, feel free to reach out anytime.