The Year-Over-Year Number Still Looks Soft, but the Seasonally Adjusted Signal Is Quietly Turning
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On June 3, 2026, the Toronto Regional Real Estate Board reported that the Greater Toronto Area resale market tightened materially in May 2026: 6,583 home sales through the MLS System, up 6.3% from May 2025, against just 17,698 new listings, down 18.9% year-over-year. The MLS HPI Composite benchmark sat 6.7% below May 2025, and the average selling price came in at $1,069,700, down 4.6% from a year earlier. On a seasonally adjusted month-over-month basis, sales rose 10% versus April 2026 while new listings fell 2.1%, the average price ticked slightly higher, and the HPI Composite edged slightly lower.
The headline numbers still tell the soft story Toronto homeowners have been reading for over a year. The narrative buried underneath is more interesting. For existing GTA homeowners, the most useful signal in the May data is not the 4.6% year-over-year average price decline. It is the simultaneous rise in seasonally adjusted sales and drop in seasonally adjusted listings — the supply-demand inflection that historically precedes a price floor. That distinction matters because the next wave of 2021-vintage five-year fixed mortgages is now entering renewal, and appraisal-driven loan-to-value ratios sit downstream of exactly the metric — the benchmark home price — that has finally stopped trending sharply lower.
This article walks through what TRREB reported, why the seasonally adjusted signal is the one worth following, and what the data implies for homeowners thinking about equity, renewals, and the back half of 2026.
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The May 2026 release describes a market where sales and listings moved decisively in opposite directions. According to the Toronto Regional Real Estate Board, GTA REALTORS reported 6,583 transactions through the MLS System, an increase of 6.3% over May 2025, while new listings entered into the system fell to 17,698 units, down 18.9% over the same period. That is the kind of split — buyer activity firming, seller activity retreating — that pulls inventory absorption rates higher and shifts negotiating power incrementally back toward sellers.
The HPI Composite benchmark, which controls for changes in the mix of homes sold, was 6.7% lower than the May 2025 reading. The average selling price of $1,069,700 was 4.6% lower year-over-year. The benchmark and the average move at different speeds for structural reasons — more on that below — but both confirm that prices remain meaningfully below where they sat a year ago.
The forward-looking commentary from TRREB pointed in the same direction. Chief Information Officer Jason Mercer noted that if sales continue to strengthen relative to listings, "selling prices will level off and even start to grow as we move into 2027." TRREB President Daniel Steinfeld attributed the stronger spring to improved affordability stemming from both lower selling prices and lower borrowing costs, and projected further improvement in the second half of 2026.
The seasonally adjusted month-over-month figures are the more revealing part of the release. On that basis, May sales were up 10% from April, new listings fell 2.1%, the average selling price was modestly higher, and the HPI Composite edged slightly lower. The fact that sales are rising into a market that is simultaneously seeing fewer new listings is the textbook setup for tightening conditions.
Seasonal adjustment matters because raw monthly real estate data is dominated by predictable annual patterns — spring surges, summer slowdowns, fall reactivations. Stripping those patterns out is what lets the underlying trend show. As Statistics Canada puts it, seasonal adjustment removes regular intra-year patterns so that month-to-month changes better reflect underlying trend and cycle movements. Applied to TRREB's May data, the message is clear: the trend turned.
The May 2026 release describes a market where sales and listings moved decisively in opposite directions. According to the Toronto Regional Real Estate Board, GTA REALTORS reported 6,583 transactions through the MLS System, an increase of 6.3% over May 2025, while new listings entered into the system fell to 17,698 units, down 18.9% over the same period. That is the kind of split — buyer activity firming, seller activity retreating — that pulls inventory absorption rates higher and shifts negotiating power incrementally back toward sellers.
The HPI Composite benchmark, which controls for changes in the mix of homes sold, was 6.7% lower than the May 2025 reading. The average selling price of $1,069,700 was 4.6% lower year-over-year. The benchmark and the average move at different speeds for structural reasons — more on that below — but both confirm that prices remain meaningfully below where they sat a year ago.
The forward-looking commentary from TRREB pointed in the same direction. Chief Information Officer Jason Mercer noted that if sales continue to strengthen relative to listings, "selling prices will level off and even start to grow as we move into 2027." TRREB President Daniel Steinfeld attributed the stronger spring to improved affordability stemming from both lower selling prices and lower borrowing costs, and projected further improvement in the second half of 2026.
The seasonally adjusted month-over-month figures are the more revealing part of the release. On that basis, May sales were up 10% from April, new listings fell 2.1%, the average selling price was modestly higher, and the HPI Composite edged slightly lower. The fact that sales are rising into a market that is simultaneously seeing fewer new listings is the textbook setup for tightening conditions.
Seasonal adjustment matters because raw monthly real estate data is dominated by predictable annual patterns — spring surges, summer slowdowns, fall reactivations. Stripping those patterns out is what lets the underlying trend show. As Statistics Canada puts it, seasonal adjustment removes regular intra-year patterns so that month-to-month changes better reflect underlying trend and cycle movements. Applied to TRREB's May data, the message is clear: the trend turned.
The seasonally adjusted average price ticked higher in May while the seasonally adjusted HPI Composite edged slightly lower. That divergence is not contradictory — it reflects the different sensitivities of the two measures to changes in the mix of homes selling. When higher-priced segments transact disproportionately in a given month, the raw average can lead the benchmark by several reporting periods.
The MLS Home Price Index and the average selling price are two different lenses on the same market. The average is what it sounds like — sum the sale prices, divide by the number of sales. It is intuitive and easy to compute, but it moves with the sales mix. A month dominated by detached homes in pricier neighbourhoods will produce a higher average even if no individual home actually appreciated. A month with more condo and townhouse activity will drag the average down.
The benchmark approaches the problem differently. As the Canadian Real Estate Association describes it, the MLS Home Price Index is designed to track underlying price trends for a "typical" home by controlling for home characteristics, so it does not swing with the sales mix the way the average can. That makes the HPI the more reliable read on how a comparable home is actually priced over time, but also makes it slower to register short-term turning points.
For a homeowner trying to gauge whether prices have actually stopped sliding, the practical move is to watch both — and to pay particular attention to whether the average and the benchmark are converging or diverging in the seasonally adjusted view. In May, the seasonally adjusted average rose while the seasonally adjusted benchmark edged lower. That is consistent with an early inflection forming in higher-priced segments before propagating broadly through the benchmark.
For existing GTA homeowners, the May data lands at a particularly relevant moment. A wave of five-year fixed mortgages originated in 2021 — at pandemic-era rates that no longer exist — is now coming up for renewal. The Bank of Canada estimated last summer that borrowers with five-year fixed-rate mortgages renewing in 2025 or 2026 could see average payment increases of about 15 to 20% compared with their December 2024 payments. That is the macro backdrop most owners renewing this year are working against.
Equity matters in that environment because appraisal-driven loan-to-value (LTV) ratios determine refinance options and lender flexibility. In Canada, CMHC's mortgage insurance materials indicate that standard refinances are generally capped at a maximum LTV of 80%, meaning homeowners must retain at least 20% equity in the property after refinancing. When benchmark home prices fall, appraised values fall with them, and the math on staying inside that 80% LTV threshold gets tighter. When benchmark prices stabilize, that math stops getting worse.
The May data points to exactly the latter. The benchmark is still 6.7% below year-ago levels — that loss has already been absorbed into appraisals — but the seasonally adjusted trajectory is no longer pointed sharply down. For an owner whose lender will pull a fresh appraisal at renewal, that distinction can determine whether refinancing into a switch lender is a clean option or a constrained one.
A flattening benchmark does not undo earlier declines. Homeowners whose 2021-vintage mortgages were underwritten against substantially higher property values may still face appraisal-related constraints at renewal even if prices stop falling tomorrow. The May data improves the trajectory, not the starting point.
The systemic context matters. The Bank of Canada's 2026 Financial Stability Report highlighted that holders of fixed-payment mortgages with terms of five years or more will face large payment increases at renewal over the next 12 months, and that these mortgages represent a meaningful share of outstanding accounts. Coverage of CMHC's spring 2026 Residential Mortgage Industry Report reinforced the same point — renewal volumes dominated industry activity through 2025 and remain elevated through 2026 as more borrowers roll off the ultra-low pandemic-era rates that defined 2020 and 2021 originations.
Against that backdrop, regional price stability becomes its own form of monetary cushion. A homeowner whose payment is rising 15 to 20% at renewal is in a different position depending on whether their property's appraised value is still drifting lower or has stabilized. May's data is the first credible signal in months that the GTA is in the stabilization camp — provided the seasonally adjusted trajectory holds in June and July.
Two near-term signals will tell the real story. The first is the June and July listings data. If new listings continue running roughly 19% below year-ago levels — or any number in that range — the tightening dynamic that defined May will compound, and the headline year-over-year average price could move closer to flat before fall. If sellers reactivate aggressively, the picture shifts and the May signal becomes harder to read.
The second is the relationship between sales and listings on a seasonally adjusted basis. The seasonally adjusted sales-to-new-listings ratio is the cleanest single metric for tightness. May produced a sharp move in that ratio because the numerator climbed while the denominator fell. Watching whether June extends, holds, or reverses that move will tell homeowners whether the inflection signal is robust or transient.
Adjacent context worth tracking sits at the policy level. TRREB has continued to advocate for provincial measures to ease housing supply constraints, citing its policy report and explicitly supporting Ontario's Bill 98, the Building Homes and Improving Transportation Infrastructure Act, 2026. Structural supply constraints are part of why a relatively modest tightening in resale listings can move prices quickly — when the underlying supply base is thin, marginal changes in flow matter more.
The number to track this summer is the seasonally adjusted month-over-month sales-to-new-listings ratio, not the year-over-year headline price. The headline price is a backward-looking summary of a market that has already moved. The seasonally adjusted ratio is the early read on where it is moving next.
The May 2026 release is not a declaration that the GTA housing market has bottomed. TRREB's own forward-looking language is measured — "level off and even start to grow as we move into 2027" — and is contingent on the supply-demand trend holding. Year-over-year price comparisons remain firmly negative, and any owner who needs to transact this summer is doing so in a market still trading well below 2024 peaks.
What the May data does suggest is that the multi-year slide is losing momentum and that the conditions for stabilization — falling listings, firming sales, improving affordability, and easing borrowing costs — are now meaningfully present rather than merely conceptual. For homeowners watching equity ahead of a 2026 renewal, that shift is the most actionable piece of information in the report. The trajectory of appraised values is what flows through to refinancing options, and the trajectory just changed direction in the seasonally adjusted view.
The article version of "level off and start to grow" is a sentence that needs another two months of data to earn. The May numbers earned the right to ask the question.
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About the Author
Ryan is the founder of Homeowner.ca and a proud Canadian homeowner based in Guelph, Ontario. Over his 25-year career in digital publishing, he has focused on transforming complex information into clear, practical guidance that helps people make confident, well-informed decisions.
