CREA Blames January’s Slump on Storms, but Listings and Price Indexes Point to a Cooler Spring Setup
For Sale sign crusted with icicles marks a frozen market as Canadian sales drop and prices retreat. (Credit: Homeowner.ca)
Canada’s housing market started 2026 with a thud. On Feb. 18, the Canadian Real Estate Association (CREA) reported on its January 2026 national statistics release that home sales fell 5.8% month-over-month on a seasonally adjusted basis, while actual activity was 16.2% below January 2025, with 22,533 homes sold nationally.
CREA, the national industry group behind monthly MLS® reporting through the Canadian Real Estate Association’s main site, framed the drop as a “weather story” first—arguing a historic winter storm in the Greater Golden Horseshoe and Southwestern Ontario suppressed activity enough to pull the national numbers down.
That explanation matters because it implies a rebound could show up quickly as the calendar turns toward spring. But the same January package also shows stress in places that weren’t buried under Ontario snow: new listings accelerated, price measures weakened, and core market-balance indicators moved further away from seller-friendly territory.
For homeowners and buyers trying to read the spring outlook, the practical question isn’t “Was January ugly?” It’s whether January was a one-off freeze—or the clearest sign yet that the market’s negotiating power is tilting away from sellers, with more inventory and fewer completed deals setting the tone.
January wasn’t just a sales story—it was a “sales down, supply up” story, which tends to matter more for pricing power than either metric alone. In the detailed month-by-month data posted in CREA’s statistics tables, January shows a rare combination: a sharp slowdown in transactions alongside a sizeable increase in new listings.
Here’s the national snapshot from the January reporting period:
Two definitions help make this data usable for real life.
First, the sales-to-new listings ratio (SNLR) is basically a “how fast are buyers consuming new supply?” indicator. CREA typically treats readings roughly between 45% and 65% as balanced; at 45%, January landed on the lowest edge of that band, which is a polite way of saying the market is flirting with buyer-leaning conditions nationally.
Second, months of inventory turns the market into a simple time question: “If no new homes were listed, how long would it take to sell everything at the current pace?” January’s 4.9 months sits close to CREA’s long-run norm (about five months), but it’s trending softer—up from 4.6 in December, and moving away from seller-market territory.
If you only watch the headline average sale price, January can look like a modest retreat. But the MLS® Home Price Index (HPI) is falling more quickly, and that gap is telling.
The HPI is designed to measure the price of a “typical” home by controlling for changing property attributes, as described in CREA’s MLS® Home Price Index resources rather than simply averaging whatever happened to sell in a given month.
That distinction matters because the average sale price can shift simply due to the mix of homes sold—more high-end transactions can push the average up, and more entry-level transactions can pull it down, even if underlying values are unchanged. CREA has discussed this mix-distortion problem for years in its economics explainer on price measures where it contrasts averages with benchmark-style approaches intended to reduce “composition” noise.
In January 2026, the benchmark-style view was clearer—and weaker: the national composite HPI was down 4.9% year-over-year, compared with a 2.6% year-over-year drop in the average price. For buyers, that can translate into more negotiating room in segments where comparable homes are actually being discounted. For sellers, it’s a warning that “my neighbour’s headline sale price” may be less informative than what the typical home in your segment is doing.
CREA’s case is straightforward: a historic storm suppressed both showings and activity in major Ontario corridors, and the national data “suggests” the story was more about weather than a real downshift in demand. As far as single-month explanations go, that’s plausible—especially when a single region represents a large share of national transactions.
But there are two reasons the storm story doesn’t fully settle the question.
One is that the national weakness came alongside a broad-based rise in new listings (driven by roughly two-thirds of local markets). That combination doesn’t look like a pure “can’t leave the house” moment; it looks like sellers were willing to list, while buyers were less willing—or less able—to transact.
The second is that analysts looking at the same dataset don’t see a neatly contained Ontario event. BMO economist Robert Kavcic wrote in BMO’s Canadian Housing Monitor for January 2026 that while storms clearly weighed on Southern Ontario, “the rest of the country wasn’t exactly humming,” pointing to softness in markets that didn’t have the same weather shock.
A more blunt interpretation came from Better Dwelling’s analysis of the CREA release which argued the market is exiting a holding pattern and sliding into a “second leg” of correction, noting that benchmark prices are at their lowest level since early 2021 and still far below the February 2022 peak.
Monthly housing data is notoriously “lumpy.” Weather can distort activity, but so can rate expectations, consumer confidence, and the simple fact that buyers and sellers often pause when prices feel uncertain. The safest read is to treat January as a signal—and look for confirmation (or reversal) in February and March.
So what’s the balanced takeaway?
January likely was disrupted by weather in specific Ontario submarkets. At the same time, the national mix—sales down, new listings up, benchmark prices falling, and market-balance ratios easing—fits a broader pattern of cautious demand meeting a slowly expanding pool of sellers. If that persists into spring, it can keep price growth muted even if transaction volumes bounce back from a storm-affected January.
Even in a national down month, the most useful story for homeowners is local: where supply is rising fastest, where buyers are pulling back hardest, and whether benchmark prices are still holding.
January’s release highlights exactly that split.
Across provinces, benchmark prices are down year-over-year in British Columbia, Alberta, and Ontario, while gains in places such as Quebec and parts of Atlantic Canada offset those declines at the national level. At the city level, CREA points to double-digit year-over-year benchmark declines in areas like Hamilton–Burlington and Oakville–Milton, while other markets posted double-digit gains—examples include Sudbury, Quebec City, and St. John’s.
The new-listings story also isn’t uniform. In January, the surge in new listings was led by major markets including Montreal, Quebec City, Calgary, Greater Vancouver, and Victoria, while many Central and Southwestern Ontario markets saw declines in both new listings and sales—evidence that weather likely suppressed activity locally even as other regions saw sellers step forward.
What this means in practice is simple: “Canada is down” doesn’t tell you whether your neighbourhood is negotiating like 2021 or like a true buyer’s market. The national averages blend together very different local realities—some places are seeing more choice and softer prices, while others are still showing resilience because supply remains tight in the specific segments buyers want.
If January’s headline has you asking “Should I buy, sell, or just wait?”, the most useful move is not trying to predict a single spring outcome. It’s watching a few local signals that tell you who has leverage right now.
Here’s a simple dashboard you can apply to your city (and ideally to your specific segment—detached, condo, entry-level, move-up):
The spring wild card is that more people may re-enter the market at the same time—buyers who paused in 2025 and sellers who held off listing. BMO has explicitly framed 2026 as part of a longer adjustment, with a “multi-year” downturn backdrop and expectations of further modest benchmark declines before a floor is found, as outlined in BMO’s January 2026 housing outlook alongside comments about cautious investors and a cooling rental market.
Meanwhile, large-bank forecasts have been leaning toward “flat-to-down” price behaviour rather than a quick snapback. A Better Dwelling summary of RBC’s outlook said RBC expected prices to largely flatline with a small decline in 2026, with rising inventory and stretched affordability keeping pressure on markets—especially in British Columbia and Ontario—according to Better Dwelling’s reporting on RBC’s housing view.
For homeowners, the practical implication is that spring may bring more activity without bringing back the easy pricing power of the pandemic-era surge. For buyers, it suggests more choice—but also more variability: some markets may stabilize quickly if listings are absorbed, while others may see further discounting if inventory builds.
