Skip to main content
Ratehub logo
Ratehub logo

February Canadian home sales surge on rate cut optimism

February 2024 CREA update

Many Canadian home buyers have put off their property purchases in recent years, due to rising interest rates and scant supply – but it appears they’re tired of waiting. The latest data for the month of February, released by the Canadian Real Estate Association, reveals benchmark home prices (measured via the association’s MLS Home Price Index), remained unchanged between the last two months, and rose 0.8% annually This marks an abrupt shift from five straight months of declines in the index – an “exceedingly rare” occurrence, says CREA.

Unlike average home sale prices, CREA’s HPI index calculates the value of the most typical home sold, with the high and low extremes stripped out. This makes it far less volatile than sale price trends.

According to CREA, there have only been three times in the last 20 years that the HPI has increased suddenly to this extent – all within the last four years, when buyers jumped back into the market after a lengthy wait.

Canadian home sales continue to recover from hike-induced slump

“It’s looking like February may end up being the last relatively uneventful month of the year as far as the 2024 housing story goes,” said Shaun Cathcart, CREA’s Senior Economist. “With so much demand having piled up on the sidelines, the story will likely be less about the exact timing of interest rate cuts and more about how many homes come up for sale this year.”

Home sales roared in at 19.7% higher than last year, with 35,523 properties sold. While that’s compared to historically low levels in 2023, it also shows the market has recovered to just 5% below the 10-year average, after many months of stagnation. This helped push the average home price up by 3.5% year over year, to $685,809.

Canadian real estate remained balanced in February

The number of homes newly listed for sale also improved, up 1.6% from January, and 24.2% annually, with 64,201 properties brought to market. “Gains may rise in the months ahead depending on how many owners are preparing to list their properties for sale this spring,” states CREA.

As this outpaced the number of sales on a monthly basis, the national sales-to-new-listings ratio (SNLR) softened to 55.6%, reflecting a well-balanced market. According to CREA, a ratio between 45% and 65% is generally consistent with balanced housing market conditions, with readings above and below this range indicating sellers’ and buyers’ markets respectively.

The number of months of inventory – which reflects the total number of active listings available for sale on the market, rose slightly to 3.8 months, from 3.7 in January. However, this is still well below the long-term average of about five months.

“After two years of mostly quiet resale housing activity there’s a feeling that things are
about to pick up,” said Larry Cerqua, Chair of CREA. “At this point, it’s hard to know whether buyers are going to wait for a signal from the Bank of Canada or whether they're just waiting for the spring listings to hit the market. Either way, neither of those are likely too far off, so if you’re hoping to buy or sell a property in 2024, contact a REALTOR® in your area today.”

There’s been cautious optimism in the mortgage market as both the Bank of Canada and the US Federal Reserve appear poised to cut their benchmark interest rates later this year, as inflation continues to trend in the right direction. Analysts anticipate that housing market activity is likely to reignite dramatically once borrowing costs become more manageable. 

The next US Federal Reserve rate announcement will be on March 20, followed by the Bank of Canada on April 10, 2024.

Also read:

Penelope Graham, Director of Content

Penelope has over a decade of experience covering real estate, mortgage, and personal finance topics and her commentary on the housing market is featured on both national and local media outlets.