National Housing Market Update
A Closer Look at the Trends
As we assess the latest developments in Canada’s housing market for May, the landscape reveals a nuanced picture of stability and opportunity. With home sales nudging up by 1.0% month-over-month and new listings showing a modest 0.5% increase, the market appears to be maintaining a balanced pace. The sales-to-listings ratio holding steady at 53% indicates a healthy equilibrium between supply and demand, crucial for sustainable market conditions.
Market Metrics: Sales, Listings, and Price Index
While home sales and new listings showed slight gains, the MLS House Price Index (HPI) saw a marginal decline of 0.2% in May, marking the ninth consecutive month of decreases and reflecting a cumulative 4.8% drop since August 2023. This trend suggests ongoing adjustments in pricing, aligning with broader economic factors and market corrections.
Interest Rates and Mortgage Outlook
A significant development influencing the market is the recent decision by the Bank of Canada to cut interest rates for the first time in over four years, lowering the overnight rate to 4.75%. This decision was driven by indications of easing underlying inflation, though risks to the inflation outlook remain under close monitoring. Anticipated further rate cuts and projected declines in mortgage rates signal potential improvements in market conditions, enhancing affordability and stimulating housing demand.
Labour Market Dynamics
May’s labour force report depicted a mixed employment landscape, with a net increase of 26,700 jobs driven primarily by gains in part-time employment. The unemployment rate edged up slightly to 6.2%, reflecting nuanced shifts in the labor market. Encouragingly, wage growth accelerated to 5.1%, outpacing headline inflation and bolstering consumer purchasing power.
Ontario Housing Market Update
Turning our focus to Ontario, the provincial housing market presents unique dynamics amidst broader national trends. While Ontario saw negligible month-over-month sales growth (+0.04%), year-over-year figures revealed a notable 17% decline in sales, remaining significantly below the 10-year average for May (-21%). Conversely, new listings surged by 19% compared to the previous year, surpassing the 10-year average by 7.6%. Active listings also saw a substantial increase, rising by 64% year-over-year and resulting in a current inventory level of 4.2 months’ supply, above the 10-year average.
Greater Toronto Area (GTA) Insights
In the Greater Toronto Area (GTA), housing prices declined by 2.6% year-over-year in May, while the sales-to-new listings ratio remained in low balanced-market territory at 40% for the sixth consecutive month. Notably, the semi-detached segment showed resilience with a modest 2% price drop year-over-year.
Other Ontario Regions
Across other regions of Ontario, including Ottawa (48% sales-to-new listings ratio), London (49%), and Hamilton (46%), balanced market conditions prevailed despite slight declines in ratios over the past month. Hamilton and Ottawa saw average price increases, contrasting with London’s 2.6% year-over-year price decrease.
Employment Trends in Ontario
Ontario’s employment landscape witnessed significant growth in May 2024, with 50,000 jobs added predominantly in part-time employment (+48,000) and minor gains in full-time roles (+1,100). Job creation was concentrated in the services-producing sector, underscoring ongoing economic diversification efforts.
Cashin Mortgages
In this evolving market environment, Cashin Mortgages stands poised to assist homebuyers and homeowners alike in navigating opportunities for financial stability and growth. As a trusted mortgage brokerage, we specialize in providing tailored solutions that align with the current economic climate. With anticipated decreases in mortgage rates, now is an opportune moment for borrowers to consider strategies like cash-in mortgages.
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