Canadian Existing-Home Sales Trend Lower in May

On Monday, the Canadian Real Estate Association (CREA) reported that home sales activity recorded over Canadian MLS® Systems declined 0.6% between April and May. Year-over-year, actual (not seasonally adjusted) monthly activity came in 5.9% lower. May sales remained a little below the average of the last 10 years. Home prices moved sideways.

The number of newly listed homes was up 0.5% month-over-month in May. The result of slower sales amid more new listings this year has been an increasing number of homes for sale across a majority of markets. As of the end of May, there were about 175,000 properties listed for sale on all Canadian MLS® Systems, up 28.4% from a year earlier but still below historical averages.

With sales down slightly and new listings up a little in May, the national sales-to-new listings ratio eased to 52.6% compared to 53.3% in April. The long-term average for the national sales-to-new listings ratio is 55%. A ratio between 45% and 65% is generally consistent with balanced housing market conditions, CREA said.

There were 4.4 months of inventory on a national basis at the end of May, up from 4.2 months at the end of April and, looking past the volatility at the onset of the COVID-19 pandemic, the highest level for this measure since the fall of 2019. The long-term average is about 5 months of inventory.

The non-seasonal adjusted National Composite MLS® Home Price Index (HPI) was 2.4% below May 2023. That it is mostly a reflection of how prices took off starting last April, something that has not yet happened this year, CREA explained. The actual (not seasonally adjusted) national average home price in May was $699,117, down 4% from May 2023.