After showing early signs of renewed momentum in June following the Bank of Canada’s first interest rate cut since 2020, the Canadian housing market took a pause in July. While home sales dipped slightly, experts predict a strong resurgence in activity in 2025, driven by the recent interest rate cuts and a significant amount of pent-up demand.
According to Shaun Cathcart, CREA’s Senior Economist, the market is anticipating rate cuts at every remaining Bank of Canada decision this year. This, coupled with a record amount of demand, suggests a significant rebound in housing activity going into 2025.
Here’s a breakdown of the key figures from July:
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National home sales
edged back 0.7% month-over-month, but still showed a 4.8% increase compared to July 2023.*
The number of newly listed properties
ticked up 0.9% month-over-month, driven primarily by a significant boost in new supply in Calgary.*
The MLS® Home Price Index (HPI)
saw a slight increase of 0.2% month-over-month but remained down 3.9% year-over-year.*
The national average sale price
was almost unchanged (-0.2%) on a year-over-year basis.While sales activity decreased slightly, the market continues to show signs of a healthier balance, with an increase in new listings. This shift offers buyers more choices than in recent years, but the window for a more relaxed house hunting experience may be closing. James Mabey, Chair of CREA, advises potential buyers to reach out to a REALTOR® in their area if they are looking to enter the market before the anticipated surge in activity.
The national sales-to-new listings ratio eased back to 52.7% in July, compared to 53.5% in June. This ratio, which indicates the balance between supply and demand, is currently within a range considered healthy for the housing market.
Despite the slight dip in activity, the stage is set for a return to a more active housing market. The combination of interest rate cuts and pent-up demand is expected to drive significant growth in the coming year.
