January home sales jump 22 per cent from last year’s weak start

January home sales jumped 22 per cent compared with a year ago, the largest year-over-year increase since May 2021, according to The Canadian Real Estate Association.

The association says the increase reflected weakness last year, which saw the worst start to almost any year in the past two decades.

Home sales in January 2024 were up 3.7 per cent on a seasonally adjusted basis when compared with December 2023, the CREA report said.

It’s worth a reminder that the winter months can make housing data variable and messy, wrote Bank of Montreal senior economist Robert Kavcic in a note.

“Activity in the December/January period is the least liquid of the year, with sales usually running well below half of peak spring volumes,” he wrote. “So we’ll really need to see how the numbers start to look in March and beyond.”

“Market sentiment has been buoyed by the prospect of Bank of Canada rate cuts and helped by a drop in fixed mortgage rates,” he wrote, though he noted that the markets now expect the central bank to start cutting the interest rate mid-year — not in time for the spring.

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With inflation slowing, a Bank of Canada interest rate cut could be on the way. The National’s Adrienne Arsenault asks John Pasalis of Realosophy Realty to break down what could be coming next for the housing market.

CREA senior economist Shaun Cathcart says trends suggest a market that is starting to turn a corner but is still working through the weakness of the last two years.

The actual national average home price was $659,395 in January, up 7.6 per cent from January 2023.

The number of newly listed properties was up 1.5 per cent month over month. The national sales-to-new listings ratio was 58.8 per cent, as sales rose faster than listings.

That ratio was neutral in Toronto, Montreal and Vancouver, while Calgary continued to have a sellers’ market. A ratio over 65 per cent indicates a sellers’ market by CREA’s standards.

Sales gains were made in the Greater Toronto Area, Hamilton-Burlington, Montreal, Calgary, Greater Vancouver and the Fraser Valley, and in Ontario’s cottage country.