It appears Canadian home buyers have hit the snooze button on coming out of hibernation.
When comparing the amount of homes sold in April to March, the number of transactions was down 1.7%.
When looking at year-over-year comparisons, home sales were up 10.1% in April 2024 compared to April 2023, but as always, it’s important to remember year-over-year comparisons offer good reference points, while month-over-month comparisons are good for analyzing trends.
So, before we look at what’s leading to the current trends, let’s do a bit of a recap of how we got here:
A frenzied market was a lot less likely this year because “we have a healthier supply of listings on the market,” according to Shaun Cathcart, Senior Economist of the Canadian Real Estate Association (CREA) in the latest CREA Housing Market Report (available to watch below).
“We have 30,000 more listings at this time this year than we did last year and new listings are totally back to normal levels at this point,” Cathcart said. April’s national sales-to-new listings ratio was down to 53.4%, indicating a “balanced” market that’s below the long-term national average of 55%.
What may be happening, he states, is that many prospective Canadian home buyers have taken an “I’ll believe it when I see it” stance when it comes to declining interest rates, which may not be on the horizon until late July.
The theory is even though there are more homes on the market, Canadian home buyers are holding back compared to last year, possibly until they are confident interest rates are on their way down.
More homes and less sales helped keep prices cool in April. CREA stated slower sales amid more new listings resulted in a sharp 6.5% jump in the overall number of properties on the market, yet the national composite MLS® Home Price Index (HPI)—the most advanced and accurate tool to gauge a neighbourhood’s home price levels and trends—was the same in April compared to March.
“The increase in listings is resulting in the most balanced market conditions we’ve seen at the national level since before the pandemic,” said James Mabey, the newly appointed Chair of CREA’s 2024-2025 Board of Directors. “Mortgage rates are still high, and it remains difficult for a lot of people to break into the market but, for those who can, it’s the first spring market in some time where they can shop around, take their time and exercise some bargaining power.”
The not seasonally adjusted National Composite MLS® HPI dipped 0.9% on a year-over-year basis, the first decline since last July. “This mostly reflects how prices took off last April, something that has not yet been repeated in 2024,” CREA stated in its monthly report.
The actual national average home price was $703,446 in April 2024, down 1.8% from April 2023.
When it comes to trying to navigate the home buying or selling process in these conditions, Mabey has a piece of advice: “Market conditions vary across the country, so if you’re thinking about buying or selling a home this year, you should contact a REALTOR® in your area today.”
Source: Realtor.ca
Contributor Matt Day
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