Average price of home sold over 400K
Canadian Real Estate Association has trimmed its sales forecast for this year even as home sales in February rose slightly compared with the previous month.
In a new forecast of Canada's closely-watched housing market, the real estate association says 2014 is off to a slower start than many years but there's no sign of a crash and predicts activity will pick up.
CREA sees resales trending higher this spring, riding the wind of slightly lower mortgage rates, but levelling off in the second half of 2014 when rates are expected to firm slightly.
However, even then, the expanding economy will likely continue to support housing, the association said Monday in an update to its December forecast.
The association now forecasts sales in 2014 will total about 463,700 units, slightly below the 475,000 projection in December, but still above last year's 457,893 sales.
"Marginally higher mortgage rates are likely to counterbalance the lift provided by stronger economic and continuing job growth, and restrain the momentum of sales activity," said Gregory Klump, the association's chief economist.
Sales through the Multiple Listing Service in February were up were up 0.3 per cent from January and up 1.9 per cent compared with a year ago.
The national average price for a home sold last month was $406,372, up 10.1 per cent from a year ago, boosted by a pick up in sales in the pricey Vancouver market.
February's increase in home resales broke a streak of five straight monthly declines.
TD Bank economist Diana Petramala says Canada's housing market is moderating, although that hasn't been reflected in prices -- as yet. She says that will likely happen next.
"Overall, sales are likely to continue at their current, sustainable pace while rising listings (of homes for sale) will help deflate price pressures over the next few years," Petramala said.
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