It may be the unusually mild weather or the modest drop in fixed mortgage rates since November—or both—but Canadian house hunters have more energy this winter. Importantly, they’re landing more deals. Home resales in Canada increased for the second month in a row in January, rising 3.7% from December. Resales are back up to where they were last summer including the December advance. It’s still historically soft though, given recent cyclical lows. The upturn suggests that the sharp correction triggered by soaring interest rates has likely run its course.
What it hasn’t done yet is turnaround declining prices. The MLS Home Price Index continues to drift lower, falling 1.2% month-over-month in January nationwide and declining 5% since August 2023. Most local markets recorded price drops between December and January including Vancouver, Winnipeg, Toronto, Hamilton, Ottawa, Montreal, Moncton and Halifax. The huge loss of affordability during the pandemic remains the dominant force weighing on property values. Calgary is among the few markets bucking the trend with exceptionally tight supply-demand conditions keeping prices on an upward trajectory.