Canadian Housing Market Update: February 2026

New year, same gear. Canada’s housing market started off 2026 in reverse.

Home sales in January 2026 were 5.8% lower than in December and down 16.2% year-over-year. Home sales have dipped every month since November, but January’s decline was by far the largest.

It’s safe to assume that buying activity was throttled in some regions by an especially brutal January. Meeting with a mortgage agent might not top the list of reasons for driving through a white-out.

But it’s hard to believe that sales would have improved to a significant degree if January had been unseasonably warm.

Home buyers face the same challenges in 2026 that they did in 2025. Home prices, mortgage rates and the cost of living don’t add up for many buyers. Canada’s unpredictable trade relationship with the U.S. continues to create uncertainty around the state of the economy.

Change has to occur for the market to wake up, and it’s not likely to come in the form of plummeting home prices or lower mortgage rates.

Outside of Toronto and Vancouver, home prices have remained sticky. The overall benchmark price for homes in January was $665,200, only 2.3% lower than it was six months ago (and still almost 8% higher than five years ago.) Rates are expected to be relatively static, too. Variable rates may not budge all year, while fixed rates will stay close to their current levels barring severe drops in government bond yields.

On the bright side, the spring market should be less competitive thanks to rising supply levels. New listings rose a healthy 7.3% from December to January, and may have grown even more if the weather had cooperated. At the end of the month, there were over 140,000 properties left for sale across Canada.

Fingers crossed that buyers will be able to take advantage once the snow melts.

Housing market losers in January

Typically, this section divides provinces into winners and losers. That’s not possible this time around, as home sales fell in every province.

On a monthly basis, most of the decreases were minor. Sales were down by more than 100 transactions in only four provinces: B.C., Alberta, Manitoba and Ontario. Of the remaining provinces, only New Brunswick saw a decline greater than 30 sales.

Things look uglier if you’re comparing January 2026 to January 2025: sales were down by at least 15% in six provinces. (This is where the lousy weather might be a little more visible in the numbers.)

The common thread across both comparisons is the trio of provinces seeing the biggest drop in sales: B.C., Alberta and Ontario.

Sales should remain under pressure in each province this year. Not only are these three of Canada’s priciest provincial housing markets, they’re also three of the most expensive provinces to live in . That kind of double-obstacle turns the average home buying marathon into a steeple-chase.

Canadian home prices in January

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.

It’s a tricky time for home prices in Canada. Growth is uneven, and it’s largely concentrated in more affordable markets. This makes sense in an unpredictable economic climate. If you’re going to risk a major purchase, you’ll probably gravitate to a more affordable option.

The price decreases we’re seeing in Canada’s most expensive markets make sense, too. Home values in B.C. and Ontario were driven through the roof during the pandemic, when ultra low mortgage rates gifted buyers unparalleled buying power. Without those rates, and the demand they created, prices never would have risen so high.

But they did, and now we’re watching them come back down to where they should be. It’s just taking a while. Consider it an extended bout of indigestion after the COVID-era feeding frenzy.