As predicted, home resales fell in May due to a variety of economic factors such as an increase in interest rates. More significantly, May was the first month the tighter mortgage regulations have been in place. The Canadian Real Estate Association determined that 37,576 homes were resold in May, down 9.5 percent from April and down 2.8 percent from the same month last year. They also suggest that this drop resulted, in majority, from a decline in sales in the Toronto, Vancouver and Ottawa areas.
In addition, the number of listings on the market have decreased for the first time in 8 months. It is likely that housing sales will slow down even more because of rising interest rates however, the steady increase in Canada’s employment rate will help to curb the decline. Although the national average house price in May rose 8.5 percent from a year earlier to C$346,881 ($336,778), the rising rates and slowing housing markets should help to stabilize prices after the recent peak.
If you are interested in purchasing a home as the housing market slows and prices relax, contact us and a Licensed Mortgage Broker would be pleased to discuss mortgage and pre-approval options with you.
Click here to read the Reuters article about the housing market slump.