Canadian Housing Market Update: March 2026

The Canadian housing market put in another lacklustre performance in February. Home sales were down 1.3% from January — the fourth consecutive monthly decline — and slid 8.1% year-over-year.

Year-to-date, sales are almost 12% lower than in the first two months of 2025, which wasn’t exactly a banner year for the market.

With prices softening and mortgage rates stable in February, the factors that held back sales in 2025 — cost of living pressures, the trade war with the U.S. and concerns about economic stability — seemed to still be in effect. An especially brutal winter hasn’t helped, either.

But buyers weren’t the only ones staying away from the market; sellers were, too. In February, new listings were down almost 4%, both monthly and year-over-year.

The decline could partially be due to icy weather. New listings absolutely tanked in Manitoba and Ontario, both of which were whalloped with heavy snowfall. But dips in new listings elsewhere may also signal a lack of confidence in the market.

You can’t blame sellers for being skeptical. The national sales-to-new-listings ratio sat at 47.6% in February, well below the long-term average of 54.8%. Active listings, the properties still for sale at the end of the month, were up 3.7% year-over-year.

If sellers are waiting for buyers to show interest, and buyers are waiting for conditions to improve, we might have a stalemate on our hands.

Housing market winners and losers in February

Even though sales were down overall, they didn’t decrease in every province, which sets February apart from what was a fairly dismal January.

On a monthly basis, sales rose in:

The increases aren’t much to get excited about, though. The biggest winners on a percentage basis, Manitoba and PEI, saw sales increase by 139 and 21 transactions, respectively. Looking at the raw numbers, Quebec led the way with an additional 267 sales in February.

Even though the increases were generally modest, it’s still somewhat encouraging to see provinces like Alberta and Quebec, where homes aren’t exactly cheap, notching sales gains in the current economic climate. It’s also somewhat odd when you consider which provinces saw sales decline in February

Compared to January, sales decreased in:

Note that the biggest percentage drops were seen in three of Canada’s most affordable provinces, all three of which enjoyed relatively strong sales in 2025. When sales start drying up in what were once housing bright spots, the outlook for the national market dims.

And it’s easy to be skeptical when looking at year-over-year figures. Compared to February 2025, sales were lower in every province except PEI. Year-to-date, sales are already down by more than 7,000 nationally versus the first two months of last year.

A rebound could still be in the offing — never doubt the power of pent-up demand — but it’ll require a huge bounce to get the market out of the hole it’s in.

Canadian home prices in February

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.

Declining prices are a double-edged sword at this point in the economic cycle. They benefit buyers, but the effect on homeowners and sellers is an issue that deserves some attention.

If you’re a homeowner dependent on equity to provide cash flow or pay for big-ticket items, softer prices could slam the door on your financial plans. And if you cashed in a TFSA or some of an RRSP to fund a home purchase, your primary asset might be earning you a lower return than if you had kept your capital in bonds or equities.

Those are long-term concerns that can be squared away when the market eventually turns a corner. More immediate pain might be felt by homeowners looking to sell in the coming weeks.

Sellers in declining markets may have no choice but to accept bids that come in below their asking price, leaving them with less capital to put into their next property. A large enough number of repeat buyers trimming their budgets would drag home prices down even further.

It’s a difficult time to be optimistic about Canada’s housing market. Demand exists, but unlocking it requires multiple keys — lower household expenses, cheaper mortgage rates, a turnaround in consumer sentiment — that all have to turn at the same time.