Introduction
In the latest snapshot of the Canadian housing market, the Canadian Real Estate Association (CREA) reports a notable increase in housing inventory for May 2024. However, despite this rise, national home sales have declined compared to the same period last year.
Increased Listings and Inventory
According to CREA, the number of new listings in May has seen a slight uptick. At the end of May, 175,000 homes were listed for sale on the Multiple Listing Service (MLS) system, marking a 28% increase from the same time last year. This represents the highest amount of unsold home inventory since the fall of 2019, indicating more options for potential buyers.
Sales and Price Trends
Despite the increase in inventory, home sales in May rose by 6% month-over-month but remained 6% below the levels of May 2023. Sales are also currently below long-term averages, reflecting a cautious market. The average home price in Canada has dropped by 4% year-over-year, now sitting just under $700,000.
Regional Highlights
Calgary stands out as the strongest major market in Canada, attributed to an influx of people moving into Alberta. The overall market is seen as waiting for further interest rate reductions, which could spur more activity.
Economic Outlook
CREA’s May report does not account for the Bank of Canada’s interest rate reduction in June. Most economists predict a more vigorous housing market in the latter half of 2024 as the trend of decreasing interest rates becomes apparent.
Conclusion
While the Canadian housing market remains cautious with higher inventory and lower sales, the potential for increased activity exists as interest rates are expected to decline further. This evolving dynamic will be closely watched by both buyers and sellers in the coming months.
