January\u2019s national data tells a very different story :<\/p>\n
\u2022 Sales : down 5.8% month-over-month<\/em> Weather doesn\u2019t explain a 16.2% year-over-year decline. Snowstorms don\u2019t cause national deterioration across provinces. And they certainly don\u2019t cause sellers across two-thirds of markets to suddenly rush inventory onto the market.<\/p>\n If anything, January looked less like suppressed activity, and a lot more like a structural shift that we should start getting used to. It feels slow when you compare it to the \u201cnew normal\u201d market we thought we created during the pandemic. But the truth is that we\u2019re actually just back to an \u201cold normal\u201d market. Slow, steady : New listings jumped 7.3% in one month. That\u2019s not subtle. Sellers certainly aren\u2019t impacted by the snowstorms : \u2022 Montreal<\/em> Meanwhile, activity declined nationally while supply increased broadly.<\/p>\n That\u2019s not weather. That\u2019s leverage shifting.<\/p>\n The sales-to-new listings ratio dropped sharply to 45%, down from 51.3% at the end of 2025. The long-term average is 54.8%. Balanced market territory sits between 45% and 65%.<\/p>\n We\u2019re now sitting at the very bottom of \u201cbalanced\u201d and bordering buyer\u2019s market conditions.<\/p>\n And when markets tip toward buyers, price discovery follows. Months of inventory rose to 4.9 months, up from 4.6.<\/p>\n As mentioned, we\u2019ve found an \u201cold normal\u201d market. Long-term average is about five months. A seller\u2019s market is below 3.6 months and a buyer\u2019s market would be above 6.4 months.<\/p>\n We\u2019re not in a full buyer\u2019s market yet, but behaviour already resembles one ..\u2026 and it\u2019s felt that way for a year now. Housing markets are driven by momentum and psychology. When buyers believe they have time, they wait. When sellers sense hesitation, they compete. That\u2019s exactly what January looked like. This is why economists fear deflation ..\u2026 it begets more deflation. If buyers see prices improving, they wait for prices to keep improving.<\/p>\n This is The Slow Grind Phase<\/strong><\/p>\n There\u2019s a misunderstanding about how housing downturns work. They don\u2019t usually collapse in one dramatic move (unless rates spike violently, like 2022). Instead, the sequence looks like this :<\/p>\n 1. Activity slows<\/em> We saw the sharp drop in 2022. What we\u2019re seeing now is the grind.<\/p>\n The MLS Home Price Index fell 0.9% month-over-month in January. Annualized, that would imply a 10% to 12% decline \u2014 though monthly volatility shouldn\u2019t be extrapolated too aggressively.<\/p>\n Year-over-year, prices are down 4.9%. From peak, the national average has fallen roughly 30%. That\u2019s a massive erasure of equity for sellers, but a massive improvement of odds for buyers ..\u2026 so why are they still on the sidelines?<\/p>\n Regional Fragmentation, A Late-Cycle Pattern<\/strong><\/p>\n Year-over-year price declines have now been visible in :<\/p>\n \u2022 British Columbia<\/em> Meanwhile, smaller and more affordable markets like Sudbury, Quebec City, and St. John\u2019s posted gains \u2013 affordability is the only thing that can stimulate markets. When peripheral, affordable markets outperform core urban centres, that often signals late-cycle dynamics. Capital retreats from high-beta, high-leverage markets first.<\/p>\n Ontario\u2019s unemployment rate is sitting around seven per cent. Household leverage remains among the highest in the G7. Mortgage rates remain restrictive. Centimetres of snow don\u2019t change that. We have a cycle to complete.<\/p>\n The “Pent-Up Demand” Question<\/strong><\/p>\n CREA maintains that 2026 will ultimately be defined by pent-up demand from first-time buyers.<\/p>\n They may not be wrong ..\u2026 eventually.<\/p>\n But pent-up demand only matters if :<\/p>\n \u2022 Buyers qualify<\/em> Right now, affordability remains stretched. Income growth hasn\u2019t materially accelerated. Investor activity is subdued outside government-insured multi-unit programs. Population growth has slowed sharply. And most importantly, buyers don\u2019t feel urgency (nor should they).<\/p>\n Pent-up demand in theory doesn\u2019t translate into transactions if buyers can\u2019t qualify or don\u2019t feel confident. And there\u2019s just not really much to be confident about in Canada\u2019s economy right now. Could that change once CUSMA is behind us later this year? Only time will tell ..\u2026 but I don\u2019t see a point in getting too excited about it.<\/p>\n This Looks Less Like Snow and More Like Normalization<\/strong><\/p>\n If you zoom out on the charts, something interesting appears. January 2026 doesn\u2019t look like a collapse. It looks like normalization. For the last five years, we kept hearing about \u201cnew normal\u201d everything. Real estate is bucking the trend and heading back to \u201cold normal\u201d.<\/p>\n Sales are around long-term averages. Inventory is near long-term averages. The sales-to-new listings ratio is weak relative to recent markets, but still within historical ranges.<\/p>\n What\u2019s changed is the direction of travel.<\/p>\n We\u2019re no longer in a post-pandemic scarcity market. We\u2019re no longer in the \u201crates are zero, buy now or be priced out forever\u201d phase.<\/p>\n We\u2019re in a market where :<\/p>\n \u2022 Supply is meeting hesitation<\/em> 2026 : Worse Than 2025?<\/strong><\/p>\n January came in significantly weaker than January 2025, and 2025 was already one of the slowest years on record in several major markets. Even if rate cuts arrive, they may arrive because economic conditions are deteriorating. And historically, people don\u2019t aggressively lever up to buy homes during recessions.<\/p>\n As it stands, this is the second-slowest start to the year in the last 15 years.
\n\u2022 Sales : -16.2% year-over-year<\/em>
\n\u2022 New Listings : +7.3% month-over-month<\/em>
\n\u2022 HPI : \u2013 0.9% month-over-month<\/em>
\n\u2022 HPI : \u2013 4.9% year-over-year<\/em>
\n\u2022 Average Price : $652,941 (-2.6% YoY)<\/em><\/p>\n
\n![\"\"](\"https:\/\/www.roryc.ca\/blog\/wp-content\/uploads\/2026\/02\/insert-1-1088x337.jpg\")
Supply is Rising. Demand is Hesitating<\/strong><\/p>\n
\n![\"\"](\"https:\/\/www.roryc.ca\/blog\/wp-content\/uploads\/2026\/02\/insert-2-1088x334.jpg\")
More importantly, that surge wasn\u2019t isolated to Ontario. It was led by :<\/p>\n
\n\u2022 Quebec City<\/em>
\n\u2022 Calgary<\/em>
\n\u2022 Greater Vancouver<\/em>
\n\u2022 Victoria<\/em><\/p>\n
\n![\"\"](\"https:\/\/www.roryc.ca\/blog\/wp-content\/uploads\/2026\/02\/insert-3-1088x347.jpg\")
Inventory is climbing toward normal, but momentum is negative.<\/p>\n
\n2. Inventory builds<\/em>
\n3. Price pressure follows<\/em>
\n4. A long grind downward begins<\/em><\/p>\n
\n\u2022 Alberta<\/em>
\n\u2022 Ontario<\/em>
\n\u2022 New Brunswick<\/em>
\n\u2022 Nova Scotia<\/em><\/p>\n
\n\u2022 Buyers feel secure in their employment<\/em>
\n\u2022 Buyers believe prices will rise<\/em>
\n\u2022 Buyers feel urgency<\/em><\/p>\n
\n\u2022 Buyers have leverage<\/em>
\n\u2022 Price growth is capped<\/em>
\n\u2022 Expectations are resetting<\/em><\/p>\n
\n![\"\"](\"https:\/\/www.roryc.ca\/blog\/wp-content\/uploads\/2026\/02\/insert-4-1088x483.jpg\")
The weather may have been cold, but the data suggests the slowdown runs deeper. The bigger question for 2026 isn\u2019t whether snow delayed demand. It\u2019s whether Canada\u2019s housing market is finally transitioning from artificial scarcity to sustainable balance, and whether that balance requires lower prices before activity can truly recover.<\/p>\n