Canadian home sales pulled back in February after strong growth in the previous two months, but prices stopped falling in a potential sign that a revival in the market is underway ahead of anticipated interest rate cuts by the Bank of Canada.
Canadian home sales fell 3.1% in February from January, giving back some of the cumulative 12.7% increase posted in the previous two months, data from the Canadian Real Estate Association showed on Monday. Sales were up 19.7% on an annual basis.
“It’s looking like February may end up being the last relatively uneventful month of the year as far as the 2024 housing story goes,” Shaun Cathcart, CREA’s senior economist, said in a statement.
“With so much demand having piled up on the sidelines, the story will likely be less about the exact timing of interest rate cuts and more about how many homes come up for sale this year.”
Money markets expect the Canadian central bank to begin an interest rate cutting campaign in June or July. The BoC has kept borrowing costs on hold at a 22-year high of 5% since July last year.
The industry group’s Home Price Index was flat on the month following five straight months of declines. It was up 0.8% annually, while the national average selling price was up 3.5% on the year.
