Canadian home sales edge higher in October as affordability pressures persist

Canadian home sales rose again in October, offering another sign of a slow recovery heading into 2026. New data from the Canadian Real Estate Association (CREA) shows national sales increased 0.9% month-over-month, marking six gains in the past seven months.

But activity remains subdued compared with last year. Actual — not seasonally adjusted — sales were 4.3% below October 2024, while the national average price fell 1.1% year-over-year.

“After a brief pause in September, home sales across Canada picked back up again in October,” Shaun Cathcart, CREA’s senior economist, said in a news release. “With interest rates now almost in stimulative territory, housing markets are expected to continue to become more active heading into 2026, although this is likely to be tempered by ongoing economic uncertainty.”

Sales pick up, but levels remain low

According to CREA, new listings fell 1.4% in last month, tightening the national sales-to-new listings ratio at 52.2%, up 1.2% from September. That remains in balanced-market territory, though it is inching closer to a seller's market.

Inventory also continues to thin. Canada had 4.4 months of inventory in October, unchanged since July but still below the long-term average of five months.

Regional trends showed mixed momentum. According to TD economist Rishi Sondhi, activity increased in British Columbia, Alberta and Quebec, while slipping in Ontario, Saskatchewan and Manitoba. Despite steady monthly gains, he cautions that the market remains far from fully recovered.

“Sales levels are still relatively low, so we’d be hard pressed to call the recovery robust,” Sondhi told CBC News. “Moving forward, we see sales continuing to grind higher, supported by pent-up demand and some improvement in job markets next year.”

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Prices stabilizing heading into 2026

The MLS Home Price Index edged up 0.2% month-over-month in October, though it remained 3% below last year. CREA notes this is the smallest annual drop since March, pointing to stabilizing conditions after an uneven year.

Additionally, the national average sale price reached $690,195. Sondhi expects modest price growth ahead but says regional differences will persist.

“Market balances favour buyers in B.C. and Ontario, which should keep price growth restrained in these markets for the next several months,” he said.

Affordability concerns deepen in Ontario

Even as demand improves, affordability remains a major challenge across the country — and new data suggests Ontario buyers face the steepest climb.

A new report from the Fraser Institute finds that mortgage payments for a typical home now exceed 50% of after-tax family income in all 14 of Ontario’s major urban centres. In Toronto, that figure reaches an eye-watering 110%.

“There’s a perception that housing outside the GTA is still somewhat affordable, but that’s not true,” Austin Thompson, senior policy analyst and study co-author, said in a statement. “Even in Windsor and Kingston, a typical home requires more than half of median after-tax earnings just for mortgage payments.”

The study also finds that affordability has deteriorated sharply since 2014, driven by rising prices and slow income growth over the past decade.

CREA expects housing activity to gradually strengthen through 2026, supported by lower rates and pent-up demand. But both economists and industry groups caution that affordability pressures will remain a defining challenge for buyers into next year and beyond.