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Home Buying, Market Intelligence, Real Estate News | June 14, 2024

May Anticipation

In May, many people were waiting to see what would happen with interest rates in early June. This anticipation led to a drop in overall sales absorptions, which were down 11 to 17 percent compared to May 2023. While multi-family product sales decreased moderately month-to-month, single-family absorptions surprisingly increased by 15% compared to last month.

Supply remains higher than last month, with year-to-date inventory increases for all product types ranging from 40 to 57 percent. The influx of inventory in April and May has caused a slight price drop in multi-family homes compared to April. However, single-family home values have modestly increased by half a percent.

When compared to the same period last year, prices in the multi-family sector have risen modestly by 1 to 2 percent. In contrast, single-family home values are down by 3% compared to May 2023. Despite the high influx of new supply, there is still not enough to significantly affect housing affordability in our province. High costs and red tape imposed by provincial and national governments are disrupting the natural supply and demand equilibrium.

With the recent 0.25 basis point reduction in the prime rate, we expect to see an increase in month-to-month absorptions for June. Rumors of further rate reductions later this year might help more people enter the market or retain their homes during renewal periods. We will have to wait and see what happens in the coming weeks and months.

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