UPDATE 1-Canadian existing home sales fall in May from April - trade group

Wed Jun 15, 2016 9:58am EDT
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(Adds forecast, regional details)

By Andrea Hopkins

TORONTO, June 15 (Reuters) - Sales of existing Canadian homes fell 2.8 percent in May from a record high in April as inventories fell to all-time lows in key regions, a report from the Canadian Real Estate Association (CREA) showed on Wednesday.

The industry group said its Canadian home price index jumped 12.5 percent in May from a year earlier, while actual sales, not seasonally adjusted, rose 9.6 percent from May 2015.

"Many of the housing markets in British Columbia and Ontario that led the monthly decline in national sales are also places where months of inventory have fallen to all-time lows," said Gregory Klump, CREA's chief economist.

"This suggests a lack of supply may be starting to rein in sales amid a continuation of strong housing demand."

The national sales to new listings ratio edged up to 64.8 percent in May 2016, the tightest reading since October 2009 and firmly into seller's market territory.

There were 4.7 months of inventory on a national basis at the end of May 2016, unchanged from April and matching the lowest level in more than six years.

The report included a quarterly forecast predicting national sales activity and prices would level off as 2016 ends and plateau in 2017, completing the long housing boom that some observers fear will crash.   Continued...