TORONTO (Reuters) - Canadian home prices climbed for the first time in nine months in May as the housing market benefited from lower borrowing costs and from an economy that was adding jobs, data showed on Wednesday.
The Teranet-National Bank Composite House Price Index, which measures changes for repeat sales of single-family homes, showed prices rose 0.5% last month from April. It was the first monthly gain since August last year.
“Declining interest rates and the strength of the labor market” have favored the housing market, said Marc Pinsonneault, a senior economist at National Bank of Canada.
Canadian mortgage rates have turned lower in recent months, with the Bank of Canada signaling in April that further interest rate hikes were off the table for now. The central bank has tightened by 125 basis points since July 2017.
Canada’s unemployment rate fell to a record low of 5.4% in May.
Prices rose in nine of the 11 metropolitan markets surveyed, led by a 2.2% gain for Hamilton, where much of Canada’s steel is produced, the data showed.
Still, May’s gain was the weakest for the month in 21 years of index history, while the annual gain, at 0.7%, was the smallest since November 2009, according to Pinsonneault.
Reporting by Fergal Smith; Editing by Cynthia Osterman