National homes sales increased by 5.1% in May from April, with 70% of markets across the country showing month-over-month increases, including the larger markets of The Greater Toronto Area (GTA), Montreal, Greater Vancouver Area (GVA), Calgary, Edmonton, and Ottawa, reports the Canadian Real Estate Association (CREA)..Sales also increased year-over-year by 1.4%, a small gain acknowledges CREA, but significant in that it was the first national year-over-year sales increase in almost two years. .“The rebound has been evident for a number of months at this point, but May really drove the point home with year-over-year comparisons for both national sales activity and national average home price back in positive territory,” said Larry Cerqua, chair of CREA..“That being said, the degree to which a recovery will be able to play out on the sales side as opposed to the price side will come down to supply, which remains quite low.”.Markets were expected to rebound from a slow fall season, said Shaun Cathcart, CREA’s senior economist..“A rebound in housing activity this year was never really in doubt because we knew the demand was there, the only question was around timing and that was answered this spring,” said Cathcart. “The 2023 housing puzzle piece that was less obvious was the reluctance of existing owners to take advantage of a slower market to make a move because they don’t want to mess with the ultra-low fixed rates they locked in during the COVID-19 pandemic.” .“Without existing owners supplying the market with new listings, this housing demand rebound may play out more acutely than might have been expected on the price side this year.” .New listings increased 6.8% in May from April, however supply of homes for sale is at historic lows..“With sales and new listings up by similar magnitudes in May, the sales-to-new listings ratio was 67.9%, little changed from 69% in April,” said Cathcart. “The long-term average for this measure is 55.1%.”.There were 3.1 months of inventory nationally at the end of May 2023, down from 3.3 months at the end of April, down more than a month from the peak at the end of January and still well below the long-term average of five months..Prices were also on the climb, with the composite home price index up 2.1%, month-over-month in May, a large increase for a single month and on the heels of a similar gain in April, said Cathcart, adding a majority of markets saw increases..“The average home price was $729,000 in May, up 3.2% from May last year,” he said. “This was the first year-over-year gain in this measure in 12 months. The national average price has recovered by more than $116,000 since January owing in large part to outsized sales rebounds in the GTA and BC Lower Mainland.”.When the GTA and GVA are removed from the calculation the national average price is reduced to $579,000.
