June home sales softened but remain resilient as Bank of Canada rate hikes resume

Despite the Bank of Canada's rate hike in June, the Canadian housing market remains resilient, with home sales moderating but still up 1.5% from May. The Canadian Real Estate Association's (CREA) data showed a total of 40,449 sales in June, up 4.7% compared to a year ago, indicating some degree of housing demand resilience. However, with new listings outperforming sales, the sales-to-new listings ratio eased, suggesting a settling down of housing markets. Average sale prices eased in June, but the historical trend suggests a potential response to the recent rate hike with a slight lag. BMO and TD economists note that there are "pockets of strength" in some markets, but overall, the housing market is expected to moderate in the months ahead. CREA's updated quarterly forecast includes upward revisions to average prices in 2023 and 2024, and downward revisions to total sales in those years, given the resumption of rate hikes and uncertainty in the market.