The average price of a Canadian home sold in January was $470,253, just 0.2 per cent more than the same month a year earlier.
The Canadian Real Estate Association reported Wednesday that sales were down by 1.3 per cent during the month, to the second-lowest monthly level since the fall of 2015.
New government rules designed to crack down on speculation in the mortgage market came into effect in October and January's numbers suggest they appear to be working.
"Canadian homebuyers face some challenges this year, including new mortgage rules that make it harder to qualify for a mortgage and regulatory changes that will push up mortgage financing costs," CREA president Cliff Iverson said in a release.
"It will take some time to gauge the extent to which these challenges will weigh on home buyers in different housing markets across Canada."
While the average price was barely changed in the past 12 months, that still masked some wide regional variances.
CREA's MLS home price index, which aggregates prices across diffferent types of housing, was up by 15.6 per cent in the past year in Greater Vancouver and by 22 per cent in Greater Toronto — two hot markets that have been pulling the national average higher for several years.
But other places, such as Calgary, where the index is down by almost three per cent in the past year, and Saskatoon, where it's down by almost one per cent, are starting to offset that upward pressure.
"Outside of the bubble-like conditions in much of Ontario and parts of B.C.," BMO economist Doug Porter said, "the market is generally very well-behaved."
In places where prices remain high, we are starting to see fewer sales, which explains how the national average is flattening despite many hot markets.
Sales are declining in the Vancouver area — down almost 40 per cent in the past year — which explains why that city is having less and less of an impact on the national average price, TD Bank economist Diana Petramala said.
"The biggest factor expected to cool housing demand in 2017 will be higher mortgage rates," she said in a note, adding that mortgage rates have increased by almost 30 basis points since the election of Donald Trump.
"Combined with deteriorating affordability as home prices rise at more than four times income growth, the higher borrowing costs will start to bite into demand," she said.