The Canadian Real Estate Association (CREA) reported that home sales in Canada declined for a fourth straight month in February. Canadian real estate market activity dipped in 2025, and muted activity has persisted into the first two months of 2026 amid consumer concerns about Canada’s economy and labour market. While purchasers have tiptoed into the real estate market, sellers have taken notice and lowered prices more in February, trying to entice those buyers to the market.

• Sales of existing homes in Canada declined by 1.3% in February. This follows a 5.8% decline in January, which was driven by inclement weather. This marks the fourth straight monthly decline. New listings declined by 3.9% in February over the previous month.
• CREA reported that the benchmark home price declined by 0.6% in February over the previous month. Compared to the previous year, the benchmark home price dropped by 4.8%. Sellers have lowered prices in hopes of driving more interest in their homes.
• Despite lower sales in February, CREA noted that activity began to pick up late in the month, reinforcing its expectations of stronger activity throughout the spring and summer months.
• On Tuesday, the federal government opened applications for its new first-time home buyers rebate. Eligible purchasers may recover up to $50,000 on substantially renovated or newly constructed homes.
• On Monday, the Canada Mortgage and Housing Corporation said housing starts increased by 4.5% to 250,900 in February.

CREA says there is a lot of pent-up demand from first-time home buyers waiting on the sidelines, which could result in higher sales over 2026. However, geopolitical tensions in the Middle East continue to escalate, which has pushed up energy prices, stoking concerns about inflation. Surging inflationary pressures could have the Bank of Canada raising interest rates, offering little support to mortgage holders. Uncertainty is high, which is weighing on the outlook for many areas of the Canadian and global economies.

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