New listings jumped 4.1% month-over-month in April, marking the traditional starting point for the spring market.

With the gain in new supply outpacing sales within the month of April, the national sales-to-new listings ratio eased to 45.6% compared to 47.1% in March. That said, this could reflect a timing issue between when properties are listed and when they eventually sell. The long-term average for the national sales-to-new listings ratio is 54.8%, with readings generally between 45% and 65% that are consistent with balanced housing market conditions.

There were 187,647 properties listed for sale on all Canadian MLS® Systems at the end of April 2026, up 2.2% from a year earlier but 6.1% below the long-term average for that time of the year.

There were 5.2 months of inventory nationwide at the end of April 2026, up slightly from February and March, driven by the influx of new spring listings. This remains very close to the long-term average for the five-month measure. Based on one standard deviation above and below that long-term average, a seller’s market would be below 3.6 months, and a buyer’s market would be above 6.4 months.

In April, the National Composite MLS® Home Price Index (HPI) experienced a slight decrease of just 0.1% on a month-over-month basis, marking the smallest decline since October 2025. This trend corresponds with tightening sale-to-list price ratios and a reduction in days on the market in recent months. Price stabilization is a crucial milestone that could encourage buyers to re-enter the market in greater numbers.

On a year-over-year basis, the non-seasonally adjusted National Composite MLS® HPI dropped by 4.2% compared to April 2025, which is the smallest decline recorded in 2026 so far.

With geopolitical tensions mounting and the tenuous ceasefire in Iran, some potential homebuyers have postponed their purchase decisions. While there remains considerable pent-up demand, and home prices in many regions have fallen sharply, especially in Ontario, which was hardest hit by the tariffs last year, along with the ongoing condo supply glut. These issues are unlikely to be resolved in the near term, so housing market weakness will remain a drag on overall economic activity.

Compounding these concerns is the surge in oil prices. Gasoline prices–a very visible component of consumer spending–have skyrocketed, causing supply disruptions in nitrogen fertilizer, plastics, aluminum and helium. Price pressures will no doubt mount, leading central banks to be concerned about potential stagflation.

Next Monday, we will see the CPI data for March. At this point, the Bank of Canada is likely to continue to “look through” the price pressures, hoping the war will end very soon.

Following the worse-than-expected US inflation data, the Canadian CPI for April will be released on May 29. If it confirms the 3.8% y/y US inflation, the Bank of Canada will seriously consider a 25 bps rate hike despite weakness in the labour market. The Bank is mindful of the negative impact of higher rates on already weak housing activity; this reduces the chances of a rate hike, but it cannot be ruled out. Among major advanced economies, central banks have already hiked interest rates in Japan, Norway and Australia. In contrast, the Fed, ECB, Bank of England, and Bank of Canada all cut rates in 2025 and have been on hold so far this year.

Judging from the recently released minutes of the last BoC meeting, the Governing Council seriously considered a rate hike at their April 29th  meeting. It was a close call then, a harbinger of the central bank’s inflation concerns.

Dr. Sherry Cooper
Chief Economist, Dominion Lending Centres