Canada home sales edge lower in November
By Andrea Hopkins
TORONTO (Reuters) - Sales of existing homes in Canada dipped in November from October as a surge in autumn sales spurred by rising mortgage rates abated, the Canadian Real Estate Association said on Monday.
The industry group for Canadian real estate agents said sales activity was down 0.1 percent last month from October.
While actual sales for November, not seasonally adjusted, rose 5.9 percent from a year earlier, CREA said activity was sharply lower than just two months earlier, when the prospect of rising mortgage rates spurred home buying.
"National sales activity in November stood 3.4 percent below the peak reached in September, providing further evidence that activity in the later summer and early fall was likely boosted by home buyers with pre-approved mortgages at lower than current interest rates jumping into the market before their pre-approvals expired," CREA said.
The prospect of rising mortgage rates typically steals demand from the future, a drop now in evidence.
But economists said they expect some bounce back in activity because bond yields, which set longer-term mortgage rates, have eased, before the overall market manages a soft landing.
"We expect activity to grind higher in the months to come following the recent decline in bond yields that will help to restore a modest amount of affordability relative to the summer," David Tulk, chief Canada macro strategist at TD Securities, said in a research note.
"But taken in conjunction with the accumulated impact of tighter mortgage regulations, higher yields expected over the course of 2014 will limit the upside for the housing market. Instead, we expect that the market is destined for a soft landing and will have less of a role to play in supporting economic growth in a recovery that will become more reliant on exports." Continued...