Home resales flat in March, prices rise

Fri Apr 15, 2011 11:39am EDT
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By Jeffrey Hodgson

TORONTO (Reuters) - Existing home sales were little changed in March from February and prices crawled higher, suggesting the housing boom that helped end the recession has stalled, though not reversed.

Industry data on Friday showed 38,710 homes changed hands in March, up just 0.1 percent from February on a seasonally adjusted basis. The average sale price rose 0.7 percent from February to just over C$371,000 ($386,500).

Sales activity was down 6.6 percent from a year earlier, when the market was coming off a post-recession boom driven partly by a sharp drop in mortgage rates.

Canada's housing market took a brief hit from the financial crisis, but avoided the meltdown seen in the United States and many other Western countries.

Canadian banks also escaped the crisis largely unscathed and were able to continue lending. The resulting double-digit housing price gains seen in late 2009 and early 2010 worried some policymakers and prompted the federal government to tighten mortgage rules.

The Canadian Real Estate Association (CREA) report on Friday showed house prices were up 8.9 percent in March from a year earlier.

But the industry group said average price gains have been skewed by a record number of multimillion-dollar sales in the Vancouver area, Canada's most expensive property market.

"If Vancouver is excluded from the equation, the national average price increase is cut by more than half," CREA Chief Economist Gregory Klump said in a statement.   Continued...

<p>A 'sale' sign advertises a home in Alexandria, Virginia July 22, 2010. REUTERS/Molly Riley</p>