Canadian home sales hold steady in March 2026, but recovery will be slower than expected

Canadian home sales showed little movement in March 2026, edging down just 0.1% compared to February, according to the Canadian Real Estate Association. On a year-over-year basis, activity was also softer, with sales coming in 2.3% below March 2025 levels. While not a sharp decline, the slowdown comes despite the arrival of the spring market, when buyer activity usually picks up. 

A key factor behind the slowdown in buyer activity is the recent rise in fixed mortgage rates. In March, fixed rates moved higher mid-month. For many would-be homeowners, this has added another layer of uncertainty at an already cautious time. The perception that these higher rates could be temporary is also playing a role, with some choosing to delay purchases in hopes of more favorable conditions later in 2026.

At the same time, not all buyers are affected equally. Those considering variable-rate mortgages may find themselves in a slightly more favorable position; variable rates are currently lower than fixed. Combined with reduced buyer competition and ample inventory, this gives variable borrowers an affordability leg up, along with better negotiating conditions. 

New listings remain limited, keeping market conditions balanced despite slow sales

New supply remained relatively flat in March 2026, with the number of newly listed properties edging down 0.2% compared to February. This continues a broader trend seen so far this year, where new listings have struggled to gain momentum and remain near their lowest levels since mid-2024 as sellers are hesitant to list while the market is chilly. 

With sales activity remaining subdued, this has helped keep market conditions in balance. The national sales-to-new listings ratio came in at 47.8% in March, sitting within the typical balanced market range of 45% to 65%. A reading below 45% typically signals a buyer’s market, while a reading above 65% points to a seller’s market. Current conditions fall within the balanced range, suggesting neither buyers nor sellers have a clear advantage. 

Home prices continue to decline, but the pace is slowing

Home prices across Canada continued to trend downward in March 2026, but the rate of decline has begun to ease. The MLS® Home Price Index (HPI) slipped 0.4% on a month-over-month basis, marking a smaller drop than in both January and February. On an annual basis, prices were down 4.7%, a slight drop from the 4.8% decline seen in February. This suggests that while prices are still adjusting, the pace of those declines is starting to slow.

The national average home price was $673,084 in March, down 0.8% from the same time last year. While average prices can vary based on the types of homes sold, the smaller annual decline supports the idea that price trends may be beginning to stabilize.

Inventory levels remain steady, giving buyers more breathing room

Inventory levels – the amount of all homes available for sale – remained stable in March 2026, with about five months of housing supply available across Canada. This is unchanged from January and February and sits right in line with the long-term average, pointing to balanced market conditions overall. In practical terms, this means buyers have more time and flexibility compared to the tighter markets seen in recent years. 

That said, supply is showing signs of tightening up. A total of 167,524 properties were listed for sale at the end of March, up just 1% from a year ago and still below historical norms for this time of year. So while conditions have improved for buyers, inventory hasn’t increased enough to fully shift the market in their favor.

Slower recovery expected for 2026 housing market

The Canadian Real Estate Association has revised its housing market outlook, pointing to a slower and more gradual recovery in 2026 than previously expected. Earlier projections were based on pent-up demand, especially from first-time buyers, returning to the market after being sidelined for several years. However, a recent rise in inflation has increased the likelihood of further rate pressure.

For 2026, home sales are now expected to reach 474,972 units, marking a modest 1% increase over 2025 levels. Growth is anticipated to be concentrated in provinces like British Columbia and Ontario, where activity has more room to recover, while other regions may see flatter or even declining sales. Nationally, the average home price is forecast to rise 1.5% to $688,955, with little to no growth expected in some of the country’s largest markets.

Looking ahead to 2027, sales are projected to increase by a further 2.1%, while home prices are expected to edge up by 0.9%. However, these projections remain sensitive to interest rate movements — if inflation pressures ease and rate hikes are avoided, both sales and price growth could come in stronger than currently forecast.

Also read:

• It became harder to buy a home in most Canadian markets in February
• Bank of Canada holds rate at 2.25% for the third time in March 2026
• Bank of Canada holds rate at 2.25% for the third time in the March 2026 announcement