Home Buyers Remain Cautious Amid Increasing Spring Listings: CREA

Despite the number of properties available for sale rising to kick off the spring market, Canadian home sales dipped in April 2024 in comparison to March, according to the Canadian Real Estate Association (CREA).

According to CREA, sales activity recorded over Canadian MLS Systems fell 1.7 per cent between March and April 2024, coming in slightly below the average of the last 10 years.

CREA also noted that the number of newly listed homes rose by 2.8 per cent on a month-over-month basis.

Slower sales amid more new listings resulted in a 6.5 per cent jump in the overall number of properties on the market, reaching its highest level since just before the onset of the COVID-19 pandemic.

According to CREA, it was also one of the largest month-over-month gains on record, second to those seen during the market slowdown of the beginning of 2022.

“April 2023 was characterized by a surge of buyers re-entering a market with new listings at 20-year lows, whereas this spring thus far has been the opposite, with a healthier number of properties to choose from but less enthusiasm on the demand side,” said Shaun Cathcart, CREA’s senior economist.

According to CREA, the actual number of transactions came in 10.1 per cent above April 2023. However, a significant part of that gain was likely due to the timing of the Easter long weekend.

CREA noted that with sales down and new listings up in April, the national sales-to-new listings ratio eased to 53.4 per cent. The long-term average for the national sales-to-new listings ratio is 55 per cent.

According to CREA, a sales-to-new listings ratio between 45 per cent and 65 per cent is generally consistent with balanced housing market conditions, with readings above and below this range indicating sellers’ and buyers’ markets respectively.

There were 4.2 months of inventory on a national basis at the end of April 2024, which was up from 3.9 months at the end of March and the highest level since the onset of the pandemic, noted CREA. The long-term average is roughly five months of inventory.

“After a long hibernation, the spring market is now officially underway. The increase in listings is resulting in the most balanced market conditions we’ve seen at the national level since before the pandemic,” said James Mabey, newly appointed chair of CREA’s 2024-2025 Board of Directors.

“Mortgage rates are still high, and it remains difficult for a lot of people to break into the market but, for those who can, it’s the first spring market in some time where they can shop around, take their time and exercise some bargaining power. Given how much demand is out there, it’s hard to say how long it will last.”

The National Composite MLS Home Price Index (HPI) was unchanged from March to April, which marks the third straight month of mostly stable prices, according to CREA.

Regionally, prices are generally sliding sideways across most of the country with the exceptions remaining Calgary, Edmonton, and Saskatoon, where prices have steadily ticked higher since the beginning of 2023.

The not seasonally adjusted National Composite MLS HPI dipped 0.9 per cent on a year-over-year basis, the first decline since last July. CREA noted that it mostly reflects how prices took off last April, something that has not yet been repeated this year.

The actual national average home price was $703,446 in April 2024, down 1.8 per cent from April 2023.