Canadian New Home Prices Increase 1.9% in April, 9.9% Year-Over-Year

Statistic Canada (StatsCan) is reporting that new home prices at the national level increased 1.9% in April. Prices were up in 22 of the 27 census metropolitan areas surveyed. Continuing increases in construction costs pushed home prices higher in April. In Q1 of 2021, single-family home costs increased by 6.8%, while townhouses rose 6.9%. Most of the increases were driven by five consecutive monthly price increases for softwood lumber, which rose another 10.2% in April. Higher home prices, however, did not slow the demand for single-family homes, despite weakness in certain sectors of the economy. According to the Canadian Real Estate Association (CREA), national home sales increased 256.0% in April 2021 compared with last year. Months of inventory, which indicate how fast existing listings would sell, were relatively low at two months on a national basis. This indicates a persistent and strong demand for houses across most of the country. Nationally, new house prices rose 9.9% year over year in April — the largest increase since February 2007. Year-over-year changes in new house prices have been rapidly accelerating since December 2020.