February 2026 Housing Market Update

Overview of CREA’s February Housing Data Release

The Canadian Real Estate Association (CREA) released its housing market data for February, revealing that market activity experienced a slowdown at the beginning of the month. This deceleration was largely attributed to the lingering impact of January’s snowstorm, which continued to affect the housing sector as the month commenced.

Market Activity Trends

Despite the slow start, the report indicated a noteworthy increase in activity during the latter half of February. This resurgence in activity is seen as a promising sign, suggesting that the housing market could be poised for a rebound in the upcoming spring season.

Canada’s Housing Market Correction and Outlook

Following the record-setting surge in housing activity during the pandemic, Canada has emerged as a leader in the housing market correction. Home prices have fallen by 18% from their peak in the first quarter of 2022. At that time, the Bank of Canada had lowered the overnight rate to just 0.25%, which fuelled a dramatic rise in home prices—especially in smaller cities where remote workers were drawn to the appeal of a lower cost of living. Currently, the policy rate stands at 2.25%, down from 5.0% at the height of the tightening cycle. The previous environment of ultralow interest rates was a primary driver for the housing rally, but higher rates have since contributed to the decline in prices and overall market activity.

Pent-Up Demand and Market Dynamics

There is significant pent-up demand among prospective first-time buyers, who are expected to re-enter the housing market as winter comes to an end. This year also marks a record number of mortgage refinancings and renewals, which will lead to higher monthly mortgage payments and place additional pressure on household budgets. Affordability remains a major challenge for first-time buyers; however, mortgage rates and home prices are notably lower compared to a year ago. As the spring market approaches, a renewed wave of housing activity is anticipated, even in the context of ongoing international tensions such as the war in Iran.