Foch: May’s housing rebound is real (the starting point was just really bad)

A housing turn arrives first through behaviour.

The quiet buyer asks for a second showing. The listing agent hears fewer dead phone lines after an open house. The seller who wanted a 2022 price starts asking where the first real offer might land.

May had some of that texture. But May always has that texture.

Thirty years of data shows that sales almost always rise from April to May.

Thirty years of data shows that prices almost always rise from April to May.

CREA led with the encouraging number: national home sales rose 5.5 per cent from April on a seasonally adjusted basis. New listings fell one per cent. The sales-to-new-listings ratio moved up to 49.2 per cent from 46.2 per cent in April. After a slow start to spring, the market finally showed a pulse.

The base is the part that keeps the story honest

Actual May sales were still down 5.1 per cent from May 2025. And May 2025 was already weak, with actual activity down 4.3 per cent from May 2024. That means the market just posted a monthly rebound while still failing to clear last year’s low bar.

That is why the headline can feel more exciting than the market underneath.

A 5.5 per cent monthly jump sounds powerful because April was soft. CREA’s April report showed sales up just 0.7 per cent from March, with actual April activity still four per cent below April 2025. The rebound is real. The starting point was poor.

The May ‘rebound’ came from a weak April base: Canadian home sales chart

The annual base is no better. CREA reported 470,314 transactions in 2025, down 1.9 per cent from 2024. That followed 2023, when national sales totalled 443,511, the lowest annual level since 2008. So yes, May improved. It improved against one of the weaker modern backdrops Canadian housing has seen.

Low-base rebounds are dangerous because they make the first pulse feel like a sprint.

The better way to read May is through leverage.

Sales rose. New listings slipped. Inventory eased. Months of inventory fell to 4.8 after sitting at 5.1 through February, March and April. Five months is roughly the long-term average nationally, so the market has moved closer to ordinary after a sluggish early spring.

Market balance tightened, without reaching the long-term average

Inventory moved closer to normal after three months at 5.1

That is usually how housing markets heal. Buyers stop disappearing. Listings stop piling up. The gap between what sellers want and what buyers will pay starts to narrow. Price comes later.

Where May gets less flattering

Price is where May gets less flattering.

The MLS Home Price Index edged down 0.1 per cent from April and was 4.1 per cent lower year over year. The average sale price rose 1.5 per cent year over year to $702,079, which gives the market a cleaner headline than the benchmark does. Average price can move because of geography and product mix. The benchmark still says the typical home is carrying year-over-year damage.

Sales improved before prices did

This is where agents earn trust. A seller hears “sales jumped” and wants to push the list price. A buyer hears “the market is picking up” and worries the window has closed. Both reactions make sense. Neither reaction is enough to price a property. The right question is who has to move.

Does the seller have credible alternatives to this buyer? Does the buyer have a cheaper substitute, a new-build incentive, an assignment listing, a rental option, a rate hold, or the patience to wait? Housing prices change when the side with less patience starts conceding.

May suggests sellers gained a little ground. Buyers still have leverage in many markets because prices have not turned and actual sales remain below last year. That is price discovery with more people in the room.

A tale of two markets

The national number also hides the bigger split. The old cliché finally fits: Canada is becoming a tale of two markets.

The provincial chart tells the story better than the national average. Since January 2022, Ontario is down 16.1 per cent and British Columbia is down 9.1 per cent. Every other province shown is positive. New Brunswick is up 40.6 per cent, Newfoundland and Labrador 39.4 per cent, Saskatchewan 33.9 per cent, Nova Scotia 27.8 per cent, Quebec 25.8 per cent, Manitoba 24.3 per cent, Alberta 23.4 per cent and P.E.I. 14.9 per cent.

Outside Ontario and B.C., many markets are near or through their cycle highs. Ontario and B.C. are still digesting the boom. I’ve explained this a few times but I’ll do it again. Where people can afford to buy houses, they buy houses. Where they can’t, they don’t. This is most easily visible when looking at house prices across the country since the market “peaked” nationally and the Bank of Canada’s interest rate hiking cycle began.

Provincial house price comparison, indexed to January 2022 (peak national price)

But on a volume basis, the story is different. Just as the low April base can explain away the “strength” in Canada’s housing market in May, the fact that Ontario and British Columbia dominate 40 to 60 per cent of the national index is also used to explain away its weakness. Many markets are doing just fine on price, but no market is selling more units than it did at peak volume in May of 2021.

Provincial home sales comparison, indexed to May 2022 (peak national May volume)

Nonetheless, the split we’re seeing across Canada changes the conversation at the kitchen table — or on social media, where I’m constantly reminded that there’s no “Canadian market.” It’s true.

In Ontario or B.C., a seller may still be anchored to the neighbour’s 2022 sale. The buyer is anchored to today’s payment, today’s inventory, builder incentives and the next available substitute. In New Brunswick, Newfoundland and Labrador or Saskatchewan, the seller may be sitting in a market where price memory is less of a problem because the market has already moved through the old high.

Clients do not buy a national market. They buy a choice set available in the area they’re looking to buy. That choice set may include resale, pre-construction, assignments, rentals and doing nothing. It may include a builder offering a lower effective price because of incentives or tax treatment. It may include a resale seller who believes the peak comparable is still relevant. Buyers sort those options quickly.

That is why new-build pricing can spill into resale values. If a builder lowers the end price through incentives, rebates or smaller releases priced to clear, that number becomes part of the buyer’s mental model. A sold-out project does not automatically mean the old market is back. Sometimes it means the builder finally found the price where buyers would show up.

That is especially important in softer Ontario and B.C. markets, where resale sellers are competing against new product, assignments and investor-owned inventory. The market does not care what the seller needs. It cares what the buyer can choose instead.

What this means for sellers, buyers and agents

For sellers, May is a reason to get serious. It is not a reason to get greedy.

More demand can help a well-priced listing. It does very little for an owner asking the market to underwrite yesterday’s peak. The best listings will use the improved traffic to create urgency at a price buyers can defend to themselves, their lender and their family.

For buyers, May is a warning against assuming every listing will keep getting softer.

Better conditions usually disappear first in the cleanest product: good location, no major work needed, clean status certificate, a closing date that solves someone’s problem. The house nobody wants can sit for months in any market. The house everyone understands reprices faster.

For agents, the operating lesson is simple: Do not sell certainty. Sell judgement.

Know whether the market you are in looks like Ontario and B.C., or like the rest of the country. Know whether the headline monthly gain is being flattered by a weak base. Know whether the price conversation is being shaped by resale comparables, builder incentives, assignments, rentals or buyer fatigue.

May gave the Canadian housing market a pulse. A pulse is a sign of life. It is not proof the patient is ready to run. The next phase belongs to agents who can explain the difference.

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