Is 2026 a Buyer's Market? What Rising Inventory Means for Mortgage Shoppers
Author : Emma Theodore | Published On : 14 Aug 2026
If you tried to buy in 2021 or 2022, you remember bully bids, waived conditions, and homes selling within days of listing. That environment has faded. Through most of 2026, the story has been different: prices have pulled back from their 2022 peak, and buyers have had more room to negotiate than they've seen in years.
But the picture has been shifting as the year has gone on, and the honest answer to is this a buyer's market depends on exactly when you're asking. Here's what the data actually shows, and what it means if you're preparing to apply for a mortgage.
Where Things Stood Through Most of 2026
TRREB measures market balance using the sales to new listings ratio (SNLR) the share of new listings that actually sell in a given month. A ratio below roughly 40% typically signals buyer's market conditions, since it means far more homes are coming onto the market than are selling.
For much of the first half of 2026, that's exactly the environment Toronto was in. By June, the SNLR sat around 39%, and prices had fallen meaningfully from their early 2022 peak the aggregate benchmark price had dropped by roughly a quarter from that high. Combined with more inventory sitting on the market, buyers had leverage that hadn't existed in years: below asking offers, financing and inspection conditions back in play, and multiple listings to choose from rather than a single option under time pressure.
The Market Has Been Tightening Since
Here's where it gets more nuanced. By July, conditions had shifted again. New listings dropped substantially compared to a year earlier, while sales held relatively steady which meant active buyers faced more competition for a shrinking pool of homes. TRREB's own analysis noted that with sales making up a larger share of listings, buyers may find less room to negotiate going forward, and that if the trend held, price declines could start to level off in the second half of the year.
Some forecasts through mid 2026 had already flagged this: months of supply had been narrowing compared to the year before, even as sales volume rose. In other words, the buyer-friendly window that opened earlier in the year may be narrowing rather than widening.
What This Means If You're Mortgage Shopping Right Now
Because Toronto's market has genuinely moved in two different directions within the same year, the practical guidance depends less on a single label and more on what's actually happening when you're ready to buy.
Get your mortgage pre-approval sorted before you shop, not after.With conditions shifting month to month, a solid pre-approval lets you move quickly if you find the right property, whether the market has more room to negotiate or has tightened back up. TRREB's own data has pointed to well over 100,000 buyers still sitting on the sidelines if that demand re-enters the market at once, negotiating leverage can disappear faster than expected.
Watch the qualification math, not just the price.Even with prices down meaningfully from their peak, affordability in Toronto remains tighter than in most of the country, and the mortgage stress test continues to be one of the biggest constraints on what buyers can actually qualify for. A lower price doesn't automatically mean an easier mortgage approval if your income and debt load haven't kept pace.
Rate direction still matters more than any single month's SNLR. The Bank of Canada held its policy rate steady through much of 2026 after a series of earlier cuts, giving buyers a more predictable rate environment to plan around than in prior years. Locking in a mortgage rate once you've found a home you're committed to protects you from short-term rate movement while your deal closes.
Should You Wait for Better Conditions?
It's tempting to wait for the most buyer-friendly month to reappear. A few reasons that may not pay off:
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The buyer-friendly window may already be closing. If new listings keep falling while sales hold steady, the negotiating room that existed earlier in 2026 could shrink through the back half of the year.
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Pent-up demand is a real risk. A large pool of buyers waiting on the sidelines means any renewed confidence in the market could bring competition back quickly.
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Rates aren't expected to fall dramatically further. With the central bank holding steady, waiting for a much lower rate to combine with a soft market may mean waiting through a window that's already partly closed.
The Bottom Line
Toronto's housing market in 2026 has swung between genuine buyer's market conditions earlier in the year and a noticeably tighter environment by summer. For mortgage shoppers, the smartest approach isn't to wait for a perfect label it's to get pre-approved, understand exactly what you can qualify for under current stress test rules, and be ready to act while whatever negotiating room exists is still on the table.
Mortgage rates and market conditions can shift month to month. The figures above reflect TRREB and Bank of Canada data available as of mid-2026 check current local statistics and speak with a licensed mortgage professional before making a purchase decision.
