(Toronto) Home sales, prices and listings fell in November from the previous month as many potential buyers and sellers hunkered down waiting for signs of easing interest rates, said Thursday the Canadian Real Estate Association (CREA).
Sales fell 0.9% from November last year, and fell by the same margin on a seasonally adjusted basis from October.
New listings fell 1.8% in November compared to the previous month. This is the second month of decline in listings following a 2.2% drop in October, which marked the first decline since March.
The drop in new listings shows that sellers are increasingly waiting until next year, even though a surprising number of them entered the market in early fall, analyzed senior economist Shaun Cathcart of the ACI, in a press release.
“Having not received offers that they were willing to accept, it appears that many of them are resigning themselves to waiting until next year,” he said.
The average home price decreased 0.3% from the previous month, or 1.1% according to the MLS Home Price Index, while the index increased 0.6% from l ‘last year to $735,500.
The actual national average price of a home sold in November was $646,134, up 2% from November 2022.
Cathcart says it’s probably wise for homeowners to wait before putting their property up for sale.
“This is probably a good move given that recent expectations for interest rate cuts suggest the spring market may be a little more active than we thought,” he said.
The Bank of Canada has kept rates unchanged through three rounds of decisions, but has warned it could raise them again, although forecasters expect the next move to be a cut.
The U.S. Federal Reserve on Wednesday kept its key interest rate unchanged, but indicated it planned to cut its benchmark rate by three-quarters of a point next year.
Mortgage rates fell in November, but that wasn’t enough to boost the market, Rishi Sondhi, an economist at TD Bank, said in a note.
“Even though rates fell last month, they remained at high levels, which was enough to weigh on home sales,” he said.
Overall, home sales are 18% below pre-pandemic levels, with significant declines last month in Manitoba, British Columbia and Quebec, while Ontario saw growth notable in sales, Mr. Sondhi added.
Despite Ontario’s gains, conditions in the province still favor sellers and, like in British Columbia, could lead to price reductions in the coming months, he said.
“Notably, markets are much tighter elsewhere in the country, which is expected to result in relatively strong price growth in the coming months,” Mr Sondhi said.
While sales are well below historical norms, inventory also remains subdued at 4.2 months, below the long-term average of nearly five months, noted Sherry Cooper, chief economist of the Bank’s Lending Centers. Dominion.
She said in a note that while it will likely be several months before the Bank of Canada cuts rates, market-determined interest rates have fallen sharply and fixed mortgage rates have also fallen, but not significantly. more moderate. It expects the overnight rate to fall by 1% by the end of 2024.
“Activity in the housing sector will strengthen in 2024 and 2025, although the economy faces a substantial increase in monthly mortgage payments due to the number of renewals or refinancings, which will peak in 2026,” Ms. Cooper wrote.
Royal LePage also expects the rate cuts to fuel a market rebound, predicting in its 2024 outlook released Thursday that overall national home prices will rise 5.5% year over year over of the fourth quarter of next year.
Larry Cerqua, president of ACI, said that overall the market appears to be stabilizing in balanced territory and a soft landing is increasingly in sight.
“I don’t expect the resale market to make headlines over the next few months,” he predicted.
