When you are considering your next housing change: A note from TD Economics this week. Home sales on a six month winning streak The existing home market continued to improve in August with home sales up 2.8% in the month and 11.1% on a year-over-year (y/y) basis. · Prices rose 8.1% (y/y) – the fastest growth since July 2011. However, some of the price gains reflect the fact that households are choosing single family homes over less expensive condos. The home price index adjusted for quality rose by a much lesser 2.9% (y/y). Prices for single-family homes rose around 3.5%, while condo prices were up by just 1.9%. · With trends in listings lagging those of sales, the Canadian housing market has tightened in recent months, but still remains balanced. · Most strength was driven by double-digit sales gains in Toronto, Vancouver, Edmonton and Calgary. Key Implications · The housing market has proven more resilient in 2013 than we had anticipated, particularly notable on the price side. · The recent strength in Canadian housing needs to be kept in perspective. Sales are still well below historical peak levels. Four rounds of insured mortgage rule tightening have worked to temper home sales, which are still 11% below the peak reached in late 2009. · Some of the strength over the summer months may reflect buyers jumping into the market in order to get ahead of increases in interest rates – 5-year mortgage rates have increased 70 basis points since June 2013. Looking forward, however, the increase in longer-term mortgage rates is likely to keep housing demand in check. Diana Petramala, Economist
Posted on: Tue, 17 Sep 2013 13:56:42 +0000
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