The Canadian housing market showed tentative signs of stabilization in October as both sales activity and prices recorded modest monthly gains, according to the latest data from the Canadian Real Estate Association (CREA). While the market continues to face year-over-year declines, industry experts point to gradual improvement from the economic shocks that rattled the sector earlier in 2025.
Market Shows Modest Monthly Improvement
CREA's latest housing market report reveals that 42,068 homes changed hands across Canada in October, representing a 0.9 percent increase from September but remaining 4.3 percent below last year's levels. The non-seasonally adjusted national average sale price edged up 0.2 percent monthly to $690,195, though this still reflected a 1.1 percent decrease compared to October 2024.
Shaun Cathcart, senior economist at CREA, described the current market conditions as "moving in the right direction" despite persistent economic uncertainty related to international trade tensions. "The market really burst to life last October in this very narrow window of time between when rates had come down but we weren't in a trade war yet," Cathcart explained. "So, we're down a little bit from that. But in general, compared to earlier this year, things have been trending up steadily."
Price Declines Showing Signs of Stabilization
The association's closely watched National Composite MLS Home Price Index declined three percent in October compared to the same month last year. However, CREA noted this represented the smallest year-over-year decrease since March, suggesting the market's downward price pressure may be easing.
Cathcart attributed the annual price weakness primarily to "the initial tariff shock" in the first quarter of 2025 that "scared everyone back to the sidelines and pulled the rug out from under the spring market." He expressed optimism about future trends, stating, "I think that once we get through the winter and into the beginning of next year, you're going to see those year-over-year declines shrink. We might even move back into positive territory, because I don't see prices falling further at this point, as buyers come back into the market."
Inventory and Listings Show Balanced Conditions
The report indicated that properties listed for sale across all Canadian MLS systems reached 189,000 listings in October, up 7.2 percent year-over-year and described as "very close" to long-term seasonal averages. Meanwhile, new listings showed a slight contraction, dropping 1.4 percent from September to 79,225 properties.
This combination of fewer new listings and increased sales activity resulted in a tighter sales-to-new listings ratio of 52.2 percent, up from 51 percent the previous month. CREA noted this ratio falls within the range generally associated with balanced market conditions, with readings between 45 percent and 65 percent typically indicating equilibrium between buyers and sellers.
Inventory levels remained stable at 4.4 months of supply nationally, marking the lowest level since January and sitting below the long-term average of five months. According to CREA's classification, markets with less than 3.6 months of inventory favor sellers, while those with 6.4 months or more benefit buyers.
Don Kottick, president of real estate brokerage REMAX Canada, highlighted the underlying driver of housing demand despite economic headwinds: "The fact that Canada has a chronic shortage of housing relative to its population continues to drive demand." This structural imbalance, combined with improving affordability as prices moderate in many regions and interest rates trend lower, may encourage more buying activity as the market moves toward 2026.
