Canada's housing market has taken a tumble in the past 12 months, with average selling prices and home sales volumes off sharply in the year up to February, the Canadian Real Estate Association said Thursday.

Home sales were down by almost 17 per cent compared to the same month a year earlier, and are now at their lowest level for the month in five years.

Sales activity came in below year-ago levels in 80 per cent of all local markets in February, the group that represents real estate agents said.

CREA said the average selling price of a home sold in February was $494,000 — a five per cent decline in the past 12 months. But much of that plunge is because of the Toronto market.

Earlier this month, the Toronto Real Estate Board said average selling prices were down by more than 12 per cent, and sales volumes plunged by more than a third.

Toronto's market is so big that it's skewing the national numbers, CREA said.

"The decline demonstrates the impact of GTA sales activity on the national average price."

That's part of the reason the realtor group says its national average figure can be misleading, because expensive markets like Toronto and Vancouver tend to skew the numbers one way or the other. For that reason, for several years, CREA has pitched another number — what it calls the MLS Home Price Index — as a more accurate gauge of what's happening across the country.

"The MLS Home Price Index provides the best way of gauging price trends because average price trends are prone to being strongly distorted by changes in the mix of sales activity from one month to the next," CREA said.

On that front, the picture looks a little better. But even CREA's preferred metric for house prices is showing clear signs of a slowdown. The HPI increased by 6.9 per cent in the 12 months to February, the 10th straight monthly slowdown.

The national HPI figure is now at its lowest level since 2015.

CREA blamed the slowdown on recent rule changes designed to make it harder to get a mortgage. Those rules came into effect on Jan. 1. Evidence suggests the policy response was stronger than expected, with national home sales having shattered all previous monthly records last December before dropping sharply in the first two months of 2018, CREA noted.

"The drop off in sales activity following the record-breaking peak late last year confirms that many homebuyers moved purchase decisions forward late last year before tighter mortgage rules took effect in January," said Gregory Klump,CREA's chief economist.

While 10 of the 13 markets included in the HPI were higher, most rose by much less than they used to be. In the GTA, the HPI is only up by 3.2 per cent in the past year. That's the slowest annual pace of gain seen in Toronto's HPI since 2013.

Much of it is because of a slump in detached houses, Bank of Montreal economist Robert Kavcic said after the numbers were released, because just about everything else in the city is still moving steadily higher.

"If price trends are any guide, we continue to suspect that this is almost entirely a higher-end single-detached phenomenon, while the mid-range of the market (i.e., towns and condos) remains very tight," said Kavcic.

Home prices in Oakville-Milton in Ontario dropped 1.9 per cent from a year ago, and they're down by 4.8 per cent in Regina and 3.8 per cent in Saskatoon. Everywhere else, prices have increased in the past year, but by much less than they have previously.

Calgary benchmark home prices are flat, up by 0.1 per cent in the past 12 months. Markets in British Columbia, meanwhile, are for the most part sharply higher in the past 12 months, and have bounced back from an early 2017 slowdown.

"Momentum for home sales activity going into the second quarter is also likely to be weighed down by housing market uncertainty in British Columbia, where new housing polices were introduced toward the end of February," said Klump.

Kavcic says CREA's numbers show a clear sign that Canada's housing market is cooling. But he's not among those who think the sky is falling just yet.

"Some of the early-2018 weakness in home sales reflects the fact that some demand was pulled forward into late-2017," he said. "But, the housing market is more broadly adjusting to stricter mortgage rules, Bank of Canada rate hikes, some provincial policy moves and broken speculative psychology around Southern Ontario."