Home sales were on the rise in June, but the Canadian Real Estate Association’s (CREA) latest revision to its 2024 housing market forecast includes some scaled back projections compared to what was expected at the beginning of the year.
First, let’s go over what the latest housing market data shows:
- National home sales climbed 3.7% from May to June.
- The number of newly listed properties rose 1.5% from May to June.
- The National Composite MLS® Home Price Index (HPI) inched up 0.1% from May to June—the first such gain in 11 months.
Home sales, newly listed properties, and prices all on the rise
Shaun Cathcart, CREA Senior Economist said the increases didn’t “blow the doors off” as some may have expected following the Bank of Canada’s decision to cut rates for the first time in four years back on June 5.
“(The 3.7% increase in home sales) is not record setting or anything, but it’s also not just volatility—that’s a noticeable increase that we weren’t seeing before,” Cathcart said in CREA’s latest Housing Market Report (watch below).
With sales outpacing new listings, Canada’s housing market tightened, although it still remains in balanced territory.
How does Canada’s housing market compare to 2023?
Anyone who’s focusing on year-over-year comparisons is likely to think Canada’s housing markets aren’t moving much, Cathcart notes.
For some perspective, this year’s sales and prices have been generally flat, but both sales and prices last spring took off. Headlines about surging home sales and low supply creating a hot market dominated news sites.
“It’s not about things going down this year. That was about things going up last year,” Cathcart explains, mentioning how any data from a year ago might as well be “ancient history” at this point.
The same thing goes for supply. There are significantly more listings now than the 20-year-lows seen in June 2023, but Canada’s housing supply currently sits about 20,000 listings below average.
“What we really have to focus on is month-over-month changes and seasonally adjusted data,” Cathcart says.
What will Canada’s housing market look like at the end of 2024?
CREA has scaled back its sales and pricing projections as expectations around interest rate cuts and how much the rate will fall have dwindled.
In CREA’s two previous forecasts, 2024 home sales were projected to be up more than 10% compared to sales in 2023, but that growth has now been dialed back to 6.1% (totaling 472,395 sales).
“The result of another quiet spring this year along with higher levels of supply and fewer expected rate cuts did result in a downward revision,” Cathcart said in the CREA Housing Market Report.
Canadian home buyers may like to see that CREA is also forecasting a less-than-expected increase to prices. CREA’s previous forecast in April suggested the average home price to be $710,468 in 2024, but the latest data shows the average price to be $694,393.
“The story with (sales and prices) is that we do think the worst is in the rear-view mirror at this point. We do expect things to start to move steadily in the right direction starting now,” Cathcart said.
“The second half of 2024 is widely expected to see the beginnings of a slow and gradual return of buyers into the housing market,” said James Mabey, Chair of CREA and a REALTOR® in Edmonton, Alberta. “Those buyers will face a considerably different shopping experience depending on where they are in Canada.”
Make sure to reach out to a REALTOR® in your area if you’re thinking of buying or selling.
