Canadian Housing Activity Sees Another Quiet Month in May

OTTAWA, ON, June 17, 2024 /CNW/ - While May was another relatively uneventful month for many Canadian housing markets with national month-over-month home sales edging slightly lower and new listings moving only a little higher, the Bank of Canada's recent rate drop will likely lead to increased activity moving forward.

Monthly home sales (CNW Group/Canadian Real Estate Association (CREA))

"May was another sleepy month for housing activity in Canada, although it may prove to be the last of those now that interest rates have moved lower," said Shaun Cathcart, CREA's Senior Economist. "The Bank of Canada's June 5 rate cut may have only been 25 basis points, but the psychological effect for many who have been sitting on the sidelines was no doubt huge. The question now turns to further rate cuts – specifically, how fast, and how far?"

Home sales activity recorded over Canadian MLS® Systems dipped 0.6% between April and May 2024, remaining a little below the average of the last 10 years. Home prices are also largely sliding sideways.

Highlights:

• National home sales edged back 0.6% month-over-month in May.
• Actual (not seasonally adjusted) monthly activity came in 5.9% below May 2023.
• The number of newly listed properties ticked up 0.5% month-over-month.
• The MLS® Home Price Index (HPI) dipped 0.2% month-over-month and was down 2.4% year-over-year.
• The actual (not seasonally adjusted) national average sale price posted a 4% year-over-year decrease in May.

The number of newly listed homes was up in May, though only by 0.5% on a month-over-month basis. The result of slower sales amid more new listings this year has been an increasing number of homes for sale across a majority Canadian housing markets.

As of the end of May 2024, there were about 175,000 properties listed for sale on all Canadian MLS® Systems, up 28.4% from a year earlier but still below historical averages.

"The spring housing market usually starts before all the snow has melted, somewhere around the beginning of April, but this year I believe a lot of people were waiting for the Bank of Canada to wave the green flag," said James Mabey, Chair of CREA. "That first rate cut is expected to bring some pent-up demand back into the market, and those buyers will find there are more homes to choose from right now than at any other point in almost five years. If you're thinking about jumping into the market now that interest rates are moving down, hire a REALTOR® where you live – or might like to – today."

With sales down slightly and new listings up a little in May, the national sales-to-new listings ratio eased to 52.6% compared to 53.3% in April. The long-term average for the national sales-to-new listings ratio is 55%. A sales-to-new listings ratio between 45% and 65% is generally consistent with balanced housing market conditions.

There were 4.4 months of inventory on a national basis at the end of May 2024, up from 4.2 months at the end of April and, looking past the volatility at the onset of the COVID-19 pandemic, the highest level for this measure since the fall of 2019. The long-term average is about five months of inventory. 

The National Composite MLS® Home Price Index (HPI) dipped 0.2% from April to May.

Regionally, prices are generally sliding sideways across most of the country right now. The exceptions remain Calgary, Edmonton, and Saskatoon, where prices have steadily ticked higher since the beginning of last year.

The non-seasonally adjusted National Composite MLS® HPI stood 2.4% below May 2023. This mostly reflects how prices took off starting last April, something that hasn't yet been repeated in 2024.

The actual (not seasonally adjusted) national average home price was $699,117 in May 2024, down 4% from May 2023.

The next CREA statistics package will be published on Friday, July 12, 2024.

PLEASE NOTE: The information contained in this news release combines both major market and national sales information from MLS® Systems from the previous month.

CREA cautions that average price information can be useful in establishing trends over time but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS® Systems are co-operative marketing systems used only by Canada's real estate boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada's largest single-industry associations, representing more than 160,000 REALTORS® through 69 real estate boards and associations.

Further information can be found at http://crea.ca/statistics.

SOURCE Canadian Real Estate Association (CREA)

For more information, please contact: Pierre Leduc, Media Relations, The Canadian Real Estate Association, Tel.: [phone] or 613-884-1460, E-mail: [email protected]