Homebuyers stayed on the sidelines in February 2025, leading to a significant drop in home sales across the country, according to the latest market report from the Canadian Real Estate Association (CREA). With the ongoing trade war between Canada and the United States, market activity slowed to its lowest level in over a year.
Home sales see largest drop since 2022
Sales activity fell 9.8% compared to January, marking the largest single-month decline since May 2022 and the lowest absolute number of home sales recorded since November 2023. The slowdown wasn’t limited to just a few areas — sales declined in about three-quarters of all local markets, with the most pronounced drop happening in the Greater Toronto Area and the surrounding Greater Golden Horseshoe region.
“The moment tariffs were first announced on January 20, a gap opened between home sales recorded this year and last. This trend continued to widen throughout February, leading to a significant, but hardly surprising, drop in monthly activity,” said Shaun Cathcart, CREA’s Senior Economist, in the monthly report. “This is already being reflected in renewed price softness, particularly in Ontario’s Greater Golden Horseshoe region.”
Market conditions in balanced territory
While home sales dropped, new listings also declined at a similar pace. As a result, the national sales-to-new listings ratio edged up slightly to 49.9%, compared to 48.3% in January. Historically, a balanced market sits between 45% and 65%.
There were 146,250 properties listed on MLS® Systems at the end of February, marking a 13.1% increase from a year earlier. However, this number is still well below the long-term average for this time of year, which typically sits around 174,000 listings. Inventory levels also climbed, reaching 4.7 months of available homes on a national basis, up from 4.1 months in January. The long-term average for inventory is five months, suggesting the market is slowly shifting toward more choice for buyers.
“The uncertainty of the last few weeks seems to be causing some buyers to think twice about big financial decisions right now,” said James Mabey, CREA’s Chair. “For others, a softer pricing environment and now lower interest rates will be a buying opportunity.”
Home prices record decrease
The National Composite MLS® Home Price Index (HPI) fell 0.8% from January to February. The softening in prices was particularly evident in Ontario’s Greater Golden Horseshoe region, where the decline was more pronounced. On an annual basis, the non-seasonally adjusted National Composite MLS® HPI was down 1% compared to February 2024.