Home prices across Canada have fallen to their lowest level in 14 months as high interest rates charged on mortgages keep potential buyers on the sidelines.
The average price of a home in Canada fell 1.1% in November from a month earlier, the biggest decline since September 2022 and the third consecutive monthly decrease, according to the Canadian Real Estate Association (CREA).
The average price of a home in Canada is now $735,500, the same level it was at in May of this year, said CREA.
Borrowing costs are at their highest level in more than 20 years and that has kept many potential homebuyers out of the market.
The average interest rate charged on a home mortgage in Canada is currently at 6.50%, making it difficult for many people to qualify for a loan.
New home sale listings fell by 1.8% in November after rising earlier this year. That pushed the sales-to-new listings ratio up to 49.8%, the first time that metric has risen since April of this year.
However, there is hope that interest rates will be lowered in the year ahead.
The Bank of Canada held its benchmark overnight interest rate steady for a third consecutive time earlier in December.
Futures traders are now betting that Canada’s central bank will begin lowering interest rates as early as April 2024 amid signs that the economy is cooling and inflation is under control.
