Canadian home sales chill in January as winter storm slows market
Aditi Gupta, Content Specialist
Canada’s housing market opened 2026 on a softer note, with national home sales falling 5.8% month over month in January, according to the Canadian Real Estate Association (CREA). On a non-seasonally adjusted basis, activity was 16.2% lower than in January 2025, marking a slow start to the year.
The pullback was concentrated in the Greater Golden Horseshoe and parts of Southwestern Ontario, where a historic winter storm disrupted showings, listings, and transactions. In many of these markets, both buyers and sellers appeared to pause activity amid severe weather conditions.
Outside storm-affected Ontario, sales were comparatively steadier, suggesting January’s decline may reflect localized disruption rather than a broader cooling in national demand. At the same time, new listings rose sharply across much of the country, setting up a shift in market balance to begin the year.
Canada is now on the edge of a buyers’ market
While sales slowed in January, sellers appeared eager to start the year. The number of newly listed properties rose 7.3% month over month. The increase in new listings was broad-based, with roughly two-thirds of local markets reporting gains. The surge was led by Montreal, Quebec City, Calgary, Greater Vancouver, and Victoria, where sellers moved quickly to bring inventory to market.
With listings rising and sales falling, the national sales-to-new listings ratio dropped to 45% in January, down from 51.3% at the end of 2025. The long-term national average for this measure is 54.8%, with readings between 45% and 65% generally considered consistent with balanced market conditions.
January’s 45% reading places the market at the lower edge of that balanced range. While conditions have not swung decisively toward buyers, the widening gap between rising listings and weaker sales suggests the market began the year on a slightly softer footing.
Inventory rises but remains near balanced levels
The total number of properties listed for sale on Canadian MLS® Systems reached 140,680 at the end of January. That figure is up 4.5% compared to the same time last year, suggesting supply is gradually rebuilding after tighter conditions in previous cycles. However, inventory remains 11.4% below the long-term average for this time of year. So while listings are increasing, overall supply has not yet returned to historically typical levels.
The national months of inventory measure rose to 4.9 months in January, up from 4.6 months in December. For context, the long-term average sits at five months. January’s reading keeps the market firmly within the balanced range of 3.6 to 6.4 months. However, the steady rise in inventory, combined with softer sales, suggests buyers may find a bit more breathing room in the months ahead.
Home prices edge lower amid softer demand
Home prices also moved lower in January as sales slowed and supply expanded. The National Composite MLS® Home Price Index (HPI) fell 0.9% month over month. On a year-over-year basis, the HPI was down 4.9%, pointing to continued price adjustment compared to early 2025. The non-seasonally adjusted national average sale price came in at $652,941 in January, down 2.6% from the same time last year.
Price trends varied significantly across the country. The largest year-over-year declines were recorded in Hamilton-Burlington and Oakville-Milton, where benchmark prices fell into double-digit territory. Meanwhile, cities such as Sudbury, Quebec City, and St. John’s posted double-digit annual gains.
What this means for Canada’s housing market in 2026
Looking ahead, much will depend on whether January’s weakness proves short-lived. CREA continues to point to pent-up demand, particularly from first-time buyers who have been waiting for greater affordability and rate stability. If borrowing costs remain relatively steady and economic conditions hold, activity could regain momentum as the spring market approaches.
For now, the market appears to be adjusting rather than accelerating. Conditions remain broadly balanced nationally, but the early months of 2026 suggest a housing market that is cautious, supply-driven, and sensitive to regional factors — including, in this case, the weather.
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Aditi Gupta, Content Specialist
Aditi Gupta is a content specialist at Ratehub, with a focus on creating informative content about mortgages.