Canadian home prices edge higher in January, led by Hamilton and Montreal

TORONTO (Reuters) - Canadian home prices rose modestly in January, paced by gains for the Eastern Canadian metropolitan areas of Hamilton and Montreal, data showed on Thursday.

The Teranet-National Bank Composite House Price Index, which measures changes for repeat sales of single-family homes, showed prices rose 0.1% in January.

It was “a so-so showing for a month of January,” said Marc Pinsonneault, a senior economist at National Bank of Canada.

The index has fallen in January in only three of the last 10 years, Pinsonneault said.

The metropolitan area of Hamilton, in Southern Ontario, had a gain of 0.8%, while Montreal, in the province of Quebec, was up 0.5%. Six of the 11 areas in the composite index rose.

Compared with the same month a year ago, the index climbed 2.1%, driven by gains in Eastern Canada, with the pace accelerating for the sixth straight month.

On Tuesday, Canada announced a change to a three-year-old financial stress test designed to reduce risky mortgage lending, potentially stimulating housing markets.

Reporting by Fergal Smith in Toronto; Editing by Matthew Lewis