Home sales in August down from last year, says CREA
“That said, with ever more friendly interest rates now all but guaranteed later this year and into 2025, it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
Phil Soper, chief executive of Royal LePage, said first-time buyers in particular are being rewarded for patience.
Soper explained that first-time homebuyers are more focused on their monthly carrying costs than the sticker price of the home — and currently, mortgage rates are falling while home prices are flat. Although prices typically fall with demand, Canada is grappling with a severe housing shortage, which is forming a floor under home prices.
The national average sale price (not seasonally adjusted) was almost unchanged at $649,100 in August — a 0.1 per cent increase year over year, according to CREA data. Home prices across the Canadian MLS systems also remained level month-over-month but were down 3.9 per cent since last year.
At the end of the month, there were about 177,450 properties listed for sale across the country, up 18.8 per cent from a year earlier but still more than 10 per cent below historical averages for this time of the year.
Soper said it’s rational for buyers to continue to wait, so he expects a gradual increase in transaction volumes along with home prices as interest rates fall.
However, he doesn’t anticipate any major changes in the market until the spring, which is the busiest time of year for housing activity, and projects there could be another three quarter-point cuts by mid-2025. He believes the most challenged cities — Toronto, Montreal and Vancouver — will likely experience the biggest rebound.
That said, Soper warned, “I believe that much of the benefit of those lower interest rates could be erased by rising home prices next year.”