March 20, 2026 | Buying

The Greater Toronto Area real estate market continued to shift in February 2026, with a noticeable tightening in resale housing conditions compared to this time last year.

While overall home sales came in lower year-over-year, the more significant story lies on the supply side. New listings dropped at an even sharper pace, pointing to a growing hesitation among homeowners when it comes to entering the market.

A Market Waiting for Its Moment

Right now, many buyers are still taking a wait-and-see approach.

There’s a sense that prices haven’t quite settled, and until they do, a large segment of would-be homeowners is choosing to stay on the sidelines. But this pause may not last forever.

If listing activity continues to slow as we head into the spring market, we could quickly see a shift. Fewer homes available, combined with steady demand, has the potential to spark renewed competition, which would naturally begin to put upward pressure back on prices.

The Demand Is Still There

Despite quieter sales activity, underlying demand hasn’t disappeared – it’s simply been delayed.

Industry estimates suggest that over 100,000 buyers across the GTA are currently holding off on purchasing. Many are watching for more stability in pricing, as well as broader economic signals, including movement on the trade front.

Once confidence returns, this group could re-enter the market in a meaningful way, setting the stage for stronger sales activity in the second half of 2026 and into 2027.

February by the Numbers

Looking at the data more closely:

  • 3,868 homes sold in February 2026, marking a 6.3% decrease compared to February 2025
  • 10,705 new listings hit the market, down 17.7% year-over-year
  • On a month-over-month basis, both sales and new listings declined compared to January, with listings falling at a faster rate

This imbalance between supply and demand is what’s currently shaping market conditions—and it’s something we’ll be watching closely as we move into the spring.

Prices Continue to Adjust

Home prices also reflected this period of transition.

The MLS® Home Price Index benchmark declined 7.9% year-over-year, while the average selling price landed at $1,008,968, down 7.1% compared to last February.

On a monthly basis, both benchmark and average prices edged lower compared to January, reinforcing the idea that the market is still finding its footing.

Looking Ahead: The Bigger Picture

Beyond short-term fluctuations, there’s a broader conversation happening around housing in the GTA.

One of the key challenges remains the gap between high-density condominium living and traditional detached homes. Bridging this gap – often referred to as the “missing middle” will be essential for long-term market stability and affordability.

Industry leaders continue to call for targeted government action to support the development of more diverse housing options, which could play a critical role in shaping the future of the market.

A Market on the Edge of Momentum

February’s numbers point to a market that hasn’t stalled, but rather one that’s quietly building toward its next phase.

With supply tightening and a large pool of buyers waiting for the right moment, it may not take much to shift the pace. As we move into the spring market, the balance between listings and demand will be key – and if inventory remains limited, we could see momentum return more quickly than expected.