January Existing Home Sales Rose to Record, Realtors Say
By Greg Quinn - Bloomberg
February 14 (Bloomberg) — Canadian existing-home sales rose to a record in January, boosted by warm weather and job creation, the nation’s realtor association said today.
Sales in 25 major markets rose 3.4% to a seasonally adjusted 30,359 homes in January from the previous month, the Canadian Real Estate Association said in a statement. The last monthly record was set in August 2005.
Low unemployment and mortgage rates drove existing-home sales of 483,609 last year to just under a record. Canada Mortgage and Housing Corp. expects sales of existing homes to drop 4% to 464,550 this year.
“Unseasonably warm weather in some regions may have boosted homes-sales activity in January,” Gregory Klump, the association’s chief economist, said in the statement. Rising incomes and consumer sentiment will keep the Canadian housing market on “strong footing for the foreseeable future,” he said.
The average price in January rose 11.2% from a year ago, to $299,318 ($256,727), and new listings rose 3.1% to 48,035 units from the previous month.
Record consumer spending on homes led the Bank of Canada to raise its benchmark interest rate seven times ending in May, and the central bank still says there’s a risk that rising home prices will drive inflation above its 2% target.
Still, the average five-year mortgage rate last week of 6.65% was only about 1% above a half-century low of 5.7% set in June 2005.
Just to add a quick note to the mortgage information above. While this may quote the “posted” bank rates, very rarely do people pay that rate. You can always try to haggle it down a point, or go with a mortgage broker who can almost always get you a better mortgage rate. Right now, one ouf our mortgage brokers can get most people a 5-year rate of 5.14%, which is VERY significanly lower than the 6.65% rate quoted above. That difference of 1.51% could save you around $90/month per $100,000 of mortgage!
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