The Canadian housing market experienced a significant downturn in January, with home sales plunging 16.2% compared to the previous year, according to the Canadian Real Estate Association (CREA). This sharp decline is attributed primarily to a massive winter storm that battered Southern Ontario during the month, disrupting real estate transactions across the region.
Storm Disrupts Key Housing Markets
Shaun Cathcart, a senior economist at CREA, emphasized that the drop in sales was heavily concentrated in the Greater Golden Horseshoe and Southwestern Ontario regions. These areas were directly in the path of the severe winter storm that struck around the third week of January, causing widespread transportation issues and property access problems.
"The numbers came in weaker than we anticipated, but it's all concentrated in Central and Southwestern Ontario, right along the path of that storm," Cathcart explained. He noted that many potential buyers and sellers "couldn't get to the end of their driveway for a week," making real estate transactions practically impossible during the worst of the weather.
Monthly and Seasonal Comparisons
On a seasonally adjusted basis, January home sales fell 5.8% compared to December. Despite this monthly decline, the number of newly listed properties actually increased by 7.3% month-over-month, suggesting that seller activity remained relatively strong even as buyer activity was hampered by weather conditions.
Cathcart indicated that CREA views this as a weather-related anomaly rather than a fundamental shift in housing demand. "Unless the most populated part of the country is hit with another two-foot snowstorm," he stated, the association maintains its forecast for market improvement throughout 2026.
Inventory and Pricing Trends
According to CREA's data, Canada had approximately 4.9 months' worth of housing inventory available for sale at the end of January. This figure remains close to the long-term average of five months of inventory, indicating a relatively balanced market despite the sales decline.
The real estate organization reported 140,680 properties listed for sale on all MLS systems at January's end. This represents a 4.5% increase from the previous year but remains 11.4% below the long-term average for that time of year.
National Price Movement
The national average home sale price in January was $652,941, reflecting a 2.6% decrease from January of the previous year. This price adjustment occurred alongside the sales decline, though CREA economists suggest the weather disruption played a more significant role in transaction volume than in pricing dynamics.
CREA has chosen not to adjust its 2026 housing market forecast based on January's weather-affected results, maintaining expectations for gradual market improvement as seasonal conditions normalize and economic factors continue to evolve.
