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In a forecast released July 14, CREA said that while new listings are now catching up to sales, the growing consensus that rates will not just be higher, but also higher for longer has made it downgrade its April projections.

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It now expects around 464,000 properties to be resold via the Canadian MLS systems in 2023, down from April’s forecast of 492,674 properties. The new tally is 6.8 per cent below 2022 levels.

The downgrade from its previous two national forecasts is “broadly based,” CREA said, as it expects the sales rebound in most parts of the country to be cut short by the rising borrowing costs and the uncertainty those summer interest rate hikes will create going into the fall.

It said national home sales are expected to rise 11.2 per cent to 516,072 units in 2024 — well off the previous forecast of 561,090 units — as housing markets steadily return towards trend, and monetary policy starts to move back in the direction of a more neutral stance.

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This forecast would place activity in line with its 10-year average, below 2007, 2016, 2020 and 2021, it said.

While it raised its forecast for prices slightly, the group said the trajectory of price increases would be flatter, with prices expected to mostly stabilize until interest rates start to come down.

“That’s not to say either are necessarily expected to return to declines on a month-to-month basis, but rather to stabilize or rise at a slower pace than they have in recent months,” it said.

CREA also released its monthly data for June, which showed that actual, not seasonally adjusted, transactions came in 4.7 per cent above a year ago, the largest year-over-year national sales increase in two years.

“Housing markets appear to be stabilizing heading into the summer following some big ups and downs over the last year,” CREA chair Larry Cerqua said in a press release.

Cerqua said the recovery in new listings over the past few months will give buyers more choice and should help to slow price growth over the second half of the year.

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