New listings jumped 4.1% month-over-month in April, marking the traditional starting point for the spring market.

With the gain in new supply outpacing sales within the month of April, the national sales-to-new listings ratio eased to 45.6% compared to 47.1% in March. That said, this could reflect a timing issue between when properties are listed and when they eventually sell. The long-term average for the national sales-to-new listings ratio is 54.8%, with readings generally between 45% and 65% that are consistent with balanced housing market conditions.

There were 187,647 properties listed for sale on all Canadian MLS® Systems at the end of April 2026, up 2.2% from a year earlier but 6.1% below the long-term average for that time of the year.

There were 5.2 months of inventory nationwide at the end of April 2026, up slightly from February and March, driven by the influx of new spring listings. This remains very close to the long-term average for the five-month measure. 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.

In April, the National Composite MLS® Home Price Index (HPI) experienced a slight decrease of just 0.1% on a month-over-month basis, marking the smallest decline since October 2025. This trend corresponds with tightening sale-to-list price ratios and a reduction in days on the market in recent months. Price stabilization is a crucial milestone that could encourage buyers to re-enter the market in greater numbers.

On a year-over-year basis, the non-seasonally adjusted National Composite MLS® HPI dropped by 4.2% compared to April 2025, which is the smallest decline recorded in 2026 so far.

With geopolitical tensions mounting and the tenuous ceasefire in Iran, some potential homebuyers have postponed their purchase decisions. While there remains considerable pent-up demand, and home prices in many regions have fallen sharply, especially in Ontario, which was hardest hit by the tariffs last year, along with the ongoing condo supply glut. These issues are unlikely to be resolved in the near term, so housing market weakness will remain a drag on overall economic activity.

Compounding these concerns is the surge in oil prices. Gasoline prices–a very visible component of consumer spending–have skyrocketed, causing supply disruptions in nitrogen fertilizer, plastics, aluminum and helium. Price pressures will no doubt mount, leading central banks to be concerned about potential stagflation.

Next Monday, we will see the CPI data for March. At this point, the Bank of Canada is likely to continue to “look through” the price pressures, hoping the war will end very soon.

Following the worse-than-expected US inflation data, the Canadian CPI for April will be released on May 29. If it confirms the 3.8% y/y US inflation, the Bank of Canada will seriously consider a 25 bps rate hike despite weakness in the labour market. The Bank is mindful of the negative impact of higher rates on already weak housing activity; this reduces the chances of a rate hike, but it cannot be ruled out. Among major advanced economies, central banks have already hiked interest rates in Japan, Norway and Australia. In contrast, the Fed, ECB, Bank of England, and Bank of Canada all cut rates in 2025 and have been on hold so far this year.

Judging from the recently released minutes of the last BoC meeting, the Governing Council seriously considered a rate hike at their April 29th  meeting. It was a close call then, a harbinger of the central bank’s inflation concerns.

The result marked a second straight month of limited movement after February’s sharp 84,000-job decline. Full-time employment fell by 47,000, while part-time positions increased by 29,000. Employment levels were broadly unchanged across the private and public sectors and among self-employed workers.

Employment varied little across major age groups in April. The unemployment rate rose among youth aged 15 to 24 to 14.3% and among core-aged men to 6.1%. Regionally, employment declined in Quebec, Newfoundland and Labrador, Saskatchewan, and New Brunswick, while Ontario added 42,000 jobs. Meanwhile, the employment rate slipped 0.1 percentage points to 60.5%.

Average hourly wages among employees were up 4.5% (+$1.64 to $37.77) on a year-over-year basis in April, following growth of 4.7% in March (not seasonally adjusted).

The proportion of unemployed people who had been continuously searching for work for 27 weeks or more—considered long-term unemployment—was 22.5% in April. This proportion was little changed both in the month and compared with 12 months earlier. However, it remained significantly above the pre-COVID-19 pandemic average of 17.1% observed from 2017 to 2019.

At the same time, the monthly layoff rate (0.6%) in April remained in line with the pre-pandemic average, showing no recent elevation (not seasonally adjusted).

On a year-over-year basis, the overall labour force participation rate was down 0.3 percentage points in April. This largely reflected population aging, which has put downward pressure on the labour supply as more individuals have entered retirement. Among core-aged people, the labour force participation rate was up 0.3 percentage points year over year, while for youth aged 15 to 24, it was little changed.

On a month-over-month basis, employment decreases in April were concentrated in information, culture and recreation (-25,000; -2.8%), construction (-16,000; -1.0%), and in ‘other services’ (-13,000; -1.6%), an industry which includes repair and maintenance as well as personal services.

Employment change by industry, April 2026

On a year-over-year basis, employment was little changed across most industries in April, with the notable exception of health care and social assistance, which was up 119,000 (+4.1%) over the period.

The cumulative decline in employment since January comes as US tariffs continue to loom over businesses and the war in Iran heightens global uncertainty, two forces expected to shape the Canadian economy this year. With the 50% rise in oil prices, demand destruction is already well underway.

Another important fundamental in the labour market is the rapid development of AI, which is already causing enormous layoffs, especially in the U.S. See the chart below.

In other news, the US employment report was also released this morning, showing the strongest two-month gain since 2024.

US employers added more jobs than expected for a second month, and the unemployment rate held steady in April, indicating the labour market is holding up despite rising energy costs sparked by the war in Iran.

Nonfarm payrolls rose 115,000 last month after an even bigger surge in March, marking the strongest two-month increase since 2024, according to Bureau of Labour Statistics data out Friday. The unemployment rate was unchanged at 4.3%. The report showcases a labour market that may be gaining momentum after near-zero job growth last year. It showed hiring advanced across a variety of sectors, and follows other data indicating layoff activity remains low.

The relative weakness of the Canadian labour market will discourage the Bank of Canada from tightening monetary policy too soon. To be sure, inflation remains a risk as higher energy costs become embedded in the price of a wide array of goods and services. The Bank will be reluctant to respond with rate hikes over the next few announcement dates.

Trade negotiations will accelerate in the coming months as the future of CUSMA is determined. It is hard to imagine the Bank of Canada tightening in the face of such a weak housing market.