National home sales fall in April as buyers stick to sidelines

Looks like Canada’s spring housing market remains on ice. The latest data for the month of April from the Canadian Real Estate Association shows a total of 37,745 properties traded hands over the course of the month, dipping -1.7% from March. Compared to the considerably slower conditions in 2023, though, sales are up by 10%, which CREA attributes to the timing of the Easter long weekend.

Meanwhile, sellers appear optimistic that the home buyer rush will materialize, with a total of 70,645 newly listed properties brought to market, up 2.8% on a monthly basis and a whopping 34.9% compared to last year. That’s one of the largest month-over-month gains ever, says CREA, "second only to those seen during the sharp market slowdown of early 2022.”

As a result, the total number of homes for sale increased by 6.5%, reaching a level not seen since prior to the onset of the pandemic.

“April 2023 was characterized by a surge of buyers re-entering a market with new listings at 20-year lows, whereas this spring thus far has been the opposite, with a healthier number of properties to choose from but less enthusiasm on the demand side,” said Shaun Cathcart, CREA’s Senior Economist. 

National home prices continue to stabilize

With new supply well outpacing sales, there was little upward pressure on home prices, which dipped -1.8% year over year to an average of $703,446. The MLS Home Price Index – a measure that gauges the most typical type of home sold with the high and low extremes stripped out – was flat from March and down -0.9% from 2023. This marks a third consecutive month of price stability, CREA points out, with the report stating, “This mostly reflects how prices took off last April, something that has not yet been repeated in 2024.”

According to the report, prices trended downward in markets across the country with the exception of the Prairies; prices continue to steadily increase in Calgary, Edmonton, and Saskatoon, as they have since the start of 2023.

Better balance for spring home buyers

Overall, Canada’s housing market could be considered more balanced in April, with the national sales-to-new-listings ratio (SNLR) dropping to 53.4%, just shy of the long-term average of 55%. This metric measures the level of competition within the housing market; a ratio between 45% and 65% is generally consistent with balanced housing market conditions, with readings above and below this range indicating sellers’ and buyers’ markets respectively.

From a total supply perspective, there was 4.2 months of inventory – referring to the length of time it would take to completely sell off all available homes on the market – which is up from 3.9 months in March, and marking the highest levels of inventory since the start of the pandemic lockdowns. 

“After a long hibernation, the spring market is now officially underway. The increase in listings is resulting in the most balanced market conditions we’ve seen at the national level since before the pandemic,” said James Mabey, Chair of CREA’s 2024-2025 Board of Directors.

“Mortgage rates are still high, and it remains difficult for a lot of people to break into the market but, for those who can, it’s the first spring market in some time where they can shop around, take their time and exercise some bargaining power. Given how much demand is out there, it’s hard to say how long it will last.”

Spring market awaits lower mortgage rates

It’s largely anticipated by the market and analysts that mortgage rates will start to trend lower in June or July, once the Bank of Canada cuts its trend-setting Overnight Lending Rate. Mortgage rates have hovered at multi-decade highs since July 2023, following the central bank’s aggressive 10-part hiking cycle.

The real estate industry expects that any slight improvement in affordability as a result of lower mortgage rates will revitalize home buyer demand and usher in the hot market conditions typically seen in the spring and summer. Until then, those house hunting in these early months have plenty to choose from, and slightly less competitive conditions than in spring markets past.

Also read:

• April home sales fall as Toronto buyers hold out for rate cuts
• Another rate hold from the US Federal Reserve in May
• Canadian February CPI falls to 2.8%
• Should you extend your amortization at mortgage renewal time?