CREA reports home sales down in April as mortgage rates rise

OTTAWA –

According to the Canadian Real Estate Association, April saw a slowdown in home sales from the frenetic pace they had started the year at. said Monday.

According to the association, the number of homes that were sold fell by 25.7 percent last month, to 54,894 compared with 73,907 in April 2021 when the country set a new record.

Although April’s sales were down 12.6 percent compared to March, they still rank as the third highest April sales figure just behind 2021 or 2016.

“In response to an increase in interest rates and buyer fatigue after a record-breaking two years, the housing markets across Canada have seen a sharp cooling off over the past two month. saidIn a news release, Jill Oudil (CREA Chair)

This slowdown could allow buyers to take more time to evaluate the options available on the market. It could mean that sellers will need to return to traditional marketing strategies.

CREA pointed out that fixed mortgage rates were a major factor in the slowdown. Although they have been increasing since 2021, they have been less impactful in recent months. According to the association, average discounted 5-year fixed rates rose by about 3-4 percent in a single month.

The rate has also affected how buyers perform with the mortgage stress testing, which used to require borrowers with uninsured loans (with a downpayment of at least 20%) to pay a mortgage rate that is either two percentage points higher than the contract or 5.25 percent.

CREA is available for fixed-rate borrowers saidThe stress test moved from 5.25 percent to the low range of 6 per cent, an additional roughly one percent increase in a month.

Many sellers and buyers have decided to delay listing or buying properties due to the rising interest rate and high mortgage rates.

This shift in sentiment was evident in the number new homes that were listed, which fell by 2.2% to 70,957 in October from 72,557 March.

Last month’s new listings were 91,559, which is down 10.5 percent from April 2022’s 102,294 on a nonseasonally adjusted basis.

CREA reported slower sales and fewer listings. However, Canadians were spending more on homes in 2019 than they did in 2021.

The April national average home price was just over $746,000, an increase of 7.4 percent from the $695,000 recorded in the same month last years.

CREA reduces $138,000 by excluding the Greater Toronto & Vancouver areas. said.

The national average home price fell by 3.8 percent to $741,517 in the last month, down from $771,125 for March.

The benchmark home price index price of $866,700 was reached last month. It fell 0.6% from a previous month but rose 23.7 % from a past year and 63.9 % from five years back.

The benchmark price was lowest for Saskatchewan at $271,100 and highest in B.C.It was higher in the Lower Mainland where it reached more than $1.3million.

This report by The Canadian Press first appeared May 16, 2022.