Canadian Housing Market Update — June 2026: The Spring Market Arrives

Did you hear that? It was either a warm spring wind or the collective sigh of home sellers and real estate agents who saw the Canadian Real Estate Association’s latest batch of sales data.

On a national basis, home sales in May were up 5.5% from April, by far the largest monthly jump of the year. Sales increased in eight provinces, two of which saw double-digit gains.

This was an encouraging seasonal bump in activity, especially since buying a home hasn’t gotten any easier as the year’s gone on. Higher fixed mortgage rates and gas prices due to the Iran war are major roadblocks on the path to homeownership, but variable rates around 3.4% offer buyers an alternate route.

It’s still too early to say the market has rebounded. Year-to-date, sales are down by more than 12,000 compared to the first five months of 2025. But if buyers have accepted the status quo and aren’t averse to the risks associated with variable rates, we could see that deficit shrink further in June and July.

An interesting wrinkle in projecting the market’s immediate future is the potential end of the Iran war. Theoretically, a peace deal would provide home buyers with better fixed-rate options. But that may take a while.

The war has wreaked havoc with government bond yields, which lenders use to determine fixed mortgage rates. Attacks on petroleum infrastructure and the closing of the Strait of Hormuz triggered rapid rises in oil prices, which drove yields higher. Fixed rates followed suit, and are now well over 4.5% at Canada’s biggest banks.

When the war ends and oil supplies stabilize, yields should decline, taking fixed rates with them. But it could take months for yields to return to their pre-war levels, if they ever do. Lenders won’t wait that long to start chipping away at fixed rates, but rates back in the 3.7% range may not be in the cards this year.

Housing market winners and losers in May

A whopping 80% of provincial markets experienced monthly sales increases in May. The winners this time around were:

Nova Scotia’s and Manitoba’s sales increases could largely be attributed to the awful weather each province experienced in April, so the real excitement is in B.C. and Ontario, two provinces that have generally been dragging down the national sales figure this year.

Buyers in each market were able to navigate stubbornly high prices and the rising cost of living to complete their purchases. That tenacity is a sign of strong demand, which bodes well for the future. Buyers may also be striking at just the right time, as sellers listing their homes when supply is elevated could be willing to lower their asking price.

It should be noted, however, that sales in every province were down year over year, and that 2025 was not a banner year for Canadian real estate.

PEI and Newfoundland experienced the only monthly sales declines, 9.9% and 2.7%, respectively. They also endured the most significant year-over-year decreases: 19.3% in PEI and 20.2% in Newfoundland.

The falling sales aren’t surprising; both provinces are on the wrong side of recent hot streaks. Prices may simply be too high, and inventory too low, for buyers to manage. Similar scenarios have been playing out in Saskatchewan and Alberta for most of the year, too.

Canadian home prices in May

Here’s how prices behaved in some of Canada’s biggest housing markets last month.

All percentages indicate year-over-year changes in the MLS Home Price Index benchmark price, the Canadian Real Estate Association’s preferred home price metric.

In general, the local markets experiencing the greatest price gains over the past year are those where the benchmark price is under $400,000. That trend speaks to the affordability challenges so many buyers are facing: high living costs, elevated mortgage rates and insufficient down payment savings.

You can read about these challenges and how they’re impacting home buying demand in NerdWallet’s Canadian Real Estate Sentiment Report.