Housing in 'holding pattern'

The Canadian Real Estate Association is downgrading its housing market forecast for the remainder of the year again, saying the Bank of Canada's interest rate cuts haven't spurred the gradual improvement it previously anticipated.

CREA says it now thinks the national housing market will remain in "more of a holding pattern" until next spring with 468,900 properties forecast to trade hands this year. That would mark a 5.2 per cent increase from 2023, down from its July prediction of a 6.1 per cent bump.

The new forecast comes as CREA says the average price of a home sold in September amounted to $669,630, up 2.1 per cent from September 2023. The association says it is now forecasting just a 0.9 per cent annual increase for 2024 to $683,200, down from its previous outlook of a 2.5 per cent annual increase.

On a year-over-year basis, the number of homes that changed hands in September rose 6.9 per cent, but CREA says sales ticked up just 1.9 per cent on a month-over-month basis from August after the Bank of Canada's third straight rate cut.

CREA senior economist Shaun Cathcart says that with the pace of rate cuts expected to be much faster than previously thought, some potential buyers may choose to hold off on a purchase for now, which could further boost the rebound that is expected in 2025.

There were 185,427 properties listed for sale across Canada at the end of September, up 16.8 per cent from a year earlier but still below historical averages of around 200,000 for this time of the year.