June home sales up 3.7% after interest rate cut

Home sales in June 2024 showed renewed activity, spurred by the Bank of Canada's early-month interest rate cut.

According to the Canadian Real Estate Association (CREA), existing home sales rose 3.7% from May, though they are still 9.4% below June 2023 levels. TD economist Rishi Sondhi suggested that changes to the capital gains inclusion rate may have also contributed to the increased activity.

Regionally, areas like the Greater Toronto Area and British Columbia’s Lower Mainland saw significant inventory increases, leading to a 1.5% rise in new listings. The national sales-to-new listings ratio tightened slightly to 53.9%, indicating a move towards a balanced market. The months of inventory measure dropped slightly to 4.2 months, the first decline in 2024, suggesting a potential slowdown in inventory buildup.

Despite year-over-year declines in activity and prices, month-over-month improvements hint at cautious optimism. The national average selling price rose 1.5% from May to $696,179 but is still 1.6% lower than last year. The MLS Home Price Index edged up 0.1%, the first monthly gain in 11 months, although it remains down 3.4% year-over-year. Sondhi believes market conditions will strengthen in the latter half of the year with continued economic stability and further interest rate relief.

This blog was inspired by and based on the article "June home sales up 3.7% as market responds to BoC rate cut and possibly capital gains changes" from Canadian Mortgage Trends.