Shaun Cathcart, CREA’s Chief Economist, said, “At the national level, July’s housing data was a carbon copy of the June numbers, with home sales edging up, listings down, and prices remaining stable. The more interesting story over the last few months has been below the surface of the headline national numbers, where markets across the country are generally moving back towards balance. That’s true on the Prairies, in Quebec, and on the East Coast, where most sellers’ markets have been steadily cooling off over the past year. More recently, it’s also been true of the markets in B.C.’s Lower Mainland and Ontario’s Greater Golden Horseshoe, where formerly buyers’ or borderline buyers’ markets have largely shifted back into balanced market territory.”

New listings declined by a further 1.6% on a month-over-month basis in July 2026, marking the third drop in a row.

Combined with the small increase in sales recorded in June, the national sales-to-new listings ratio tightened to 51.3% in July. This is converging on the long-term average for the national sales-to-new listings ratio of 54.7%. Readings roughly between 45% and 65% are generally consistent with balanced housing market conditions.

“The ongoing shift towards a more normal balance between supply and demand in so many markets across Canada is good news for buyers, whether that means not having to worry about your new home falling in value, or not feeling pressured to make a decision due to competing offers,” said Garry Bhaura, CREA Chair. “No matter where you are in Canada, more moderate housing market conditions can be expected to continue to bring buyers off the sidelines going forward.”

There were 205,388 properties listed for sale on all Canadian MLS® Systems at the end of July 2026, up just 0.6% from a year earlier and just 1.5% above the long-term average for that time of the year. Overall supply has been sliding sideways and is very close to average levels for over a year now.

There were 4.7 months of inventory nationally at the end of July 2026, the lowest level so far in 2026 and slightly below the long-term average of 5 months. Based on one standard deviation above and below that long-term average, a seller’s market would be below 3.6 months, and a buyer’s market would be above 6.4 months.

With the exception of Saskatchewan, New Brunswick, and Newfoundland and Labrador, which are still borderline sellers’ markets, other provinces have seen their months of inventory converge toward long-term averages in recent months. Notably, even Ontario’s months of inventory measure was only about half a standard deviation above average in July, after being in a buyers’ market for the first four months of this year.

The National Composite MLS® HPI edged up 0.1% from June to July, marking the first increase in the national measure since November 2024.

The non-seasonally adjusted National Composite MLS® HPI was down 3.3% compared to July 2025. Year-over-year declines have been shrinking since January, with the July 2026 reading marking the smallest decrease since October 2025.

The brief opening of the Strait of Hormuz triggered a sharp decline in oil prices and market-driven interest rates. Alas, the opening was short-lived as the war resumed in spades.

Despite an ongoing trade war with the US, Canada’s largest trading partner, the country’s economy appears to be picking up. The unemployment rate fell to a two-year low last month, and the latest reading on gross domestic product suggests annualized growth rebounded to 3.4% in the second quarter, higher than the central bank’s previous estimate.

While the inflation data for July ticked up a bit, the rise in gasoline prices has not spurred a generalized rise in price pressures. We believe the Bank of Canada will remain on the sidelines once again at its September 2 meeting.

South of the border, however, US long-term Treasury yields have been boosted by the crowding-out effect of the huge corporate bond financing of the AI hyperscalers.

Monday saw the yield on the 30-year US Treasury bond top 5.3% for the first time since the eve of the Global Financial Crisis in 2007, and that’s in line with global experience; Japanese 30-year yields have risen above 4% for the first time in their 27-year history, while equivalent UK gilts yield their highest since 1998. Rising long-term yields have pushed up mortgage rates in the UK, Europe and Japan.

To be sure, some of the upward rate pressure reflects inflation expectations, but three other factors are also at play: the budget deficit outlook; AI-related corporate bond issuance; and the changing Treasury buyer base. With companies issuing huge amounts of debt to fund AI capex, long Treasuries have a new competitor that might force them to offer a stronger yield, while the growing budget deficit never goes away as an issue.

While Canada’s fiscal situation is nowhere near as dire as the American fiscal imbalance, Canada cannot fully sidestep upward pressure on market-driven rates.