National home sales remain steady in July: CREA
Recent data from the Canadian Real Estate Association (CREA) has revealed that national home sales remained relatively stable in July compared to June.
The latest data from the Canadian Real Estate Association (CREA) reveals that national home sales in July 2023 remained relatively stable compared to the previous month.
In July, national home sales experienced a marginal decrease of 0.7 per cent compared to the previous month. Monthly activity, when not seasonally adjusted, surged by an impressive 8.7 per cent compared to July 2022. The number of newly listed properties saw a notable 5.6 per cent increase month-over-month.
The MLS Home Price Index (HPI) showed a 1.1 per cent month-over-month growth and a modest 1.5 per cent year-over-year decline.
In July, the actual (not seasonally adjusted) national average sale price exhibited a substantial 6.3 per cent year-over-year rise.
Home sales tracked across Canadian MLS Systems registered a slight 0.7 per cent dip from June to July 2023. Activity levels have displayed signs of steadying since May.
Although sales increased in July in more than half of the local markets, a decrease in the Greater Toronto Area (GTA) slightly affected the national total. Additionally, sales declined in the Fraser Valley, which, when combined with the GTA, offset gains seen in Montreal, Edmonton, and Calgary.
The actual (not seasonally adjusted) number of transactions in July 2023 recorded an impressive 8.7 per cent increase compared to July 2022, marking the largest year-over-year national sales boost in over two years.
“Canadian home buyers struggled in the face of high interest rates, high prices and low supply in July — and they shouldn’t expect much to change in August. A slight decrease in fixed mortgage rates might be in the cards if bond yields dip further, but buyers shouldn’t bet on any game-changing declines,” said NerdWallet Canada spokesperson and real estate financial expert, Clay Jarvis.
The number of newly listed homes increased by 5.6 per cent on a month-over-month basis in July. Following gains of 2.8 per cent in April, 7.9 per cent in May, and 5.9 per cent in June, new listings have transitioned from a 20-year low in March to approach, though still remain below, average levels by mid-summer.
With new listings surpassing sales in July, the sales-to-new listings ratio decreased to 59.2 per cent, compared to 63 per cent in June and a recent peak of 68 per cent in April. Nonetheless, this measure remains above the long-term average of 55.2 per cent.
As of the end of July 2023, there were 3.2 months of inventory on a national basis, a slight increase from 3.1 months in May and June. While this marked the first month-over-month increase since January, it remains a full month below the January 2023 level and nearly two months below the long-term average of approximately five months.
“July continued along the same trend we’ve seen emerge in recent months, with sales levelling off and new listings returning in more normal numbers,” said Larry Cerqua, chair of CREA. “This has been giving buyers more choice and balancing the market, which as of July was also slowing the rate of price growth. If you’re looking for information and guidance about how to buy or sell a property, contact a realtor in your area.”
The Aggregate Composite MLS Home Price Index (HPI) experienced a 1.1 per cent month-over-month climb in July 2023. Although this represents a larger-than-normal increase for a single month, it is only about half the magnitude of the gains seen in April, May, and June. This trend aligns with sales stabilizing as new listings recover.
Despite the more modest national-level increase, a majority of local markets continued to observe monthly price growth between June and July, as has been the case since April.
“Following a brief surge of activity in April, housing markets have settled down in recent months, with price growth now also moderating with its usual slight lag,” said Shaun Cathcart, CREA’s senior economist. “Sales and price growth are already showing signs of tapering off further in August in response to the Bank of Canada’s mid-July rate hike and messaging regarding above-target inflation for longer than previously expected. We’re probably looking at another round of ʻback to the sidelines’ for some buyers until there’s a higher level of certainty around interest rates going forward.”
The Aggregate Composite MLS HPI is currently only 1.5 per cent below year-ago levels, marking the smallest decline since October 2022. Year-over-year comparisons are likely to turn positive in the coming months, as prices continued to decline throughout the second half of 2022.
In July 2023, the actual (not seasonally adjusted) national average home price reached $668,754, reflecting a 6.3 per cent increase from July 2022.