The Canadian Real Estate Association (CREA) reported that national home sales remained steady in March, while new listings dipped slightly. Prices showed little movement, but CREA experts anticipate a stronger housing market in the upcoming months. There is significant demand for housing due to rapid population growth and first-time homebuyers’ concerns about potential price hikes if the Bank of Canada lowers interest rates.
Ottawa is providing support for first-time buyers through measures such as resuming 30-year amortization on insured mortgages for new construction and easing restrictions on the RRSP Home Buyers’ Plan. These initiatives aim to assist at-risk homeowners and stimulate the market. However, there are potential downsides, including possible unintended consequences for mortgage-backed securities and increased borrowing costs for all participants.
March data showed a slight rise in national home sales and a decrease in new listings, resulting in a tightened sales-to-new listings ratio. The market remains balanced overall, with inventory levels unchanged from February. Although March’s national average home price increased slightly year-over-year, it remains below early 2022 levels due to interest rate hikes.
In conclusion, the spring housing season is poised to be strong as pent-up demand continues to grow. The expected interest rate cuts by the Bank of Canada later this year could further boost the housing market. Stay tuned for more insights as we review the federal budget and its impact on the housing market.
Published by Dr. Sherry Cooper