Canada’s Housing Market Finds a Floor—but Not Yet a Launchpad

When it comes to real estate, I always care most about the bigger picture — because that is what actually matters for rates, mortgages, affordability, and buyer confidence.

June’s national real estate numbers are showing something we have not seen in a while: the Canadian housing market may finally be starting to stabilize. That does not mean we are suddenly heading into a huge rebound, but it does suggest things may be finding a bit of a floor.

After 16 straight months without an increase, Canada’s seasonally adjusted MLS composite benchmark price finally moved up in June. It was only a tiny increase — 0.05% — bringing the benchmark price to $657,700. On paper, that is barely a move. But the important part is the change in direction. After months of declines or flat numbers, even a small increase is worth paying attention to.

Most regions across the country are looking more stable now, while the Prairies and parts of eastern Canada are still showing stronger activity.

Condos had one of the more interesting moves in June. Apartment condo prices were up 0.65%, which was the first monthly increase in almost three years. That could be a sign that buyers are starting to look again at more affordable options, especially as detached homes remain out of reach for many.

Market balance also improved. The sales-to-new-listings ratio moved up to 50.2%, which is the first time this year it has been above 50%. Home sales also increased slightly, up 0.5% to 38,014 transactions. That is not a huge jump, but it was the third month in a row that sales increased, following a much stronger May.

That said, we are still not in a hot market. National sales are still about 11% below the 10-year average, so buyers have not rushed back in. Inventory is also fairly normal, sitting at 4.8 months of supply, just under the long-term average of 4.9 months. So we are not dealing with a major shortage of listings, but we are also not flooded with inventory either.

One of the biggest changes is affordability. The average Canadian home now costs about 4.24 times a dual median wage. At the peak in February 2022, that number was 5.95 times. So affordability has improved quite a bit and is now closer to 2019 levels.

Inflation-adjusted home prices are also down about 26% from the peak and are sitting around late-2020 levels. And here is a surprising stat: someone who bought the average home five years ago has only gained about 2% in nominal terms. That is a very weak return over five years compared to what people often assume about real estate.

The big caution is population growth. Canada’s working-age population has actually declined by 49,900 over the past year, which is the first decline outside of the pandemic period. With rates not expected to drop dramatically and immigration policy slowing population-driven demand, future activity will likely need to come from buyers who are already here and waiting on the sidelines.

So, what does all of this mean?

Home prices may have found a floor, but that does not mean they are about to take off. A stable market is not the same as a booming market.

But for buyers who have been waiting, this is the first time in a while where the conversation feels a little more balanced. Prices are more stable, affordability has improved, and there may be more room to make a thoughtful decision without the same pressure we saw during the peak.

For mortgage professionals, this is a good time to reconnect with clients who have been sitting on the fence. The opportunity is not about chasing a hot market — it is about helping people understand what has changed, what they can afford now, and whether waiting indefinitely still makes sense.

Source: Mortgage Logic News.