Canada’s slow housing market recovery grinds to a halt
The national sales-to-new listings ratio slipped to 49.1% from 51.1% in July, while months’ supply of homes on the market edged up to 4.8, close to the long-run average.
The national MLS Home Price Index was down 3.0% year over year, though the pace of decline has levelled off.
The benchmark price was flat on a month-over-month basis in seasonally adjusted terms, a trend now holding for four consecutive months.
Robert Kavcic, director and senior economist at BMO Capital Markets in Toronto, wrote in the report that the market is “working to turn over the homes that need turning over, and not much more — speculation is gone, investors are absent, and prices are holding flat alongside low and stable volumes.”
Rate ceiling takes hold
The harder news for mortgage brokers and their clients is what the report implies about rate direction. Higher long-term bond yields are keeping fixed mortgage rates elevated, and BMO Economics observed that markets are now pricing in approximately 100 basis points of Bank of Canada tightening over the next year.
