Canadian home sales fell further in February from multiyear lows in January, as steep fixed mortgage rates and persistently bitter weather exacerbated a soft market.
Home sales across the country fell 1.3 per cent on a seasonally adjusted month-over-month basis, according to data released Tuesday by the Canadian Real Estate Association, while new listings of homes declined 3.9 per cent. Sales were down 8.1 per cent in February compared to the same month last year.
The MLS Home Price Index also dipped 0.6 per cent month-over-month and was down 4.8 per cent on a year-over-year basis, CREA reported.
“A 4 per cent fixed mortgage rate is higher than what most people have been getting for 15 years, so affordability is tough,” CREA senior economist Shaun Cathcart said in an interview.
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The general trend across Canada is that home prices are flat, Royal LePage chief executive officer Phil Soper said, adding that last month’s dip in home sales is “more of the same” landscape the real estate industry has been weathering for around two years.
“We continue to expect an adaptation to the new normal,” Mr. Soper said, adding interest rates and buyer behaviour have stayed predictable.
Typically, cold weather wouldn’t change a market for more than a month, but this year’s storms are “relentless,” hitting the Ontario and Quebec markets hard, Mr. Soper said.
“In the most heavily populated areas of the country, it’s been a really aggressively cold and snowy start to 2026,” Mr. Soper said.
Mr. Cathcart said sellers were forced to make concessions to close sales during the frigid period.
Home sale activity began to pick up a bit of speed near the end of the month, with listings and sales in the third and fourth weeks of February “making up for lost time,” Mr. Cathcart added.
February’s dip is akin to the market slowdown at the beginning of 2025, when tariff threats prompted price weakness and unfavourable market conditions, Mr. Cathcart said. He expects this soft patch to relent in a similar fashion this year, adding that sectoral tariffs imposed by U.S. President Donald Trump have had a less severe impact on the national economy than earlier blanket tariffs.
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Mr. Soper said regional trends “are the real story in the national home sales picture.”
“Most of the country is treading water,” Mr. Soper said referring to the flat market, noting there has been slippage in the Greater Vancouver Area and some strength in the GTA early in March.
Mr. Soper said that aside from condo markets in Toronto and Vancouver, realtors are not watching homes linger on the market for months at a time. However, there are “certainly more homes being listed and then pulled.”
Mr. Cathcart said observers may be surprised to see some Canadian locales with “rip-roaring hot” markets, including Sudbury, Ont., Quebec City and Moncton, N.B. He added thriving markets are becoming “fewer and farther between” in the country as the record-level population increases that were driving price growth taper off.
Young people are leaving Toronto’s soft market en masse, Mr. Cathcart said, looking to the Prairies and the East Coast for more affordable options.
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Mr. Cathcart added that buyers are hesitant to flood back into the market as prices are still dropping in parts of British Columbia and Ontario.
“Prices will stabilize when the market picks up,” Mr. Cathcart added. “It’s a bit of a chicken-egg problem.”
In Toronto, “You’ve got a ton of first-time buyers who are stuck between units that are either too small or too expensive,” Mr. Cathcart said. “They’ve been locked out of the market for years.
“Think of it as a water behind the dam issue that’s going to play out at some point – and it’s probably just around the corner.”
