HIKES TO MORTGAGE RATE SLOW RESIDENTIAL HOME SALES
Housing Market at a Glance
Recent increases to mortgage rates, imposed by the Bank of Canada, have dampened the residential market throughout June, with 30.3% less residential unit sales recorded across the region compared to the same month last year.
The Association of Interior REALTORS® President Lyndi Cruickshank comments on the recent market activity by saying, “It’s not unusual that mortgage rates are impacting market activity, specifically in the higher-priced markets”. She goes on to add, “this is what typically happens when interest rates move upward. It makes buying a home more costly, making what a purchaser can afford more limited. We are seeing this effect, particularly in what is typically a higher-priced home type. However, this shift is creating a welcome opportunity for buyers to slow down in their decision making, which is a welcome relief for many.”
Last month, new residential listings experienced a positive shift, with 3,265 homes added to the available property pool – up 14.2% compared to the same period last year – and 3.1% more listings than earlier on in May (3,166).
Overall listings also saw a healthy upswing, with 7,154 listings currently on the market across the region, which marks a 45.1% increase in year-over-year comparison.
Cruikshank adds, “Our inventory is gradually picking up and supply is growing. This is benefitting both buyers and people looking to sell and move. As we don’t expect any relief in terms of interest rates in the coming days, one will have to anticipate the market while pricing properties correctly.”
The benchmark price for homes in the Central Okanagan, North Okanagan, South Okanagan and Shuswap/Revelstoke regions saw another month of double-digit percentage increases in year-over-year comparisons across all home categories, with the exception of townhomes in the Central Okanagan area. Here, the benchmark price for townhomes saw the greatest increase across all areas and home categories, sitting 27.9% higher than it did in June 2021, at $601,400.
Average Days on Market
For June, the average number of days to sell a home (which is always a good barometer to keep an eye on), rose to 45 days, 4 days longer than recorded back in May (41 days).
It’s important to note that the average of days on market mentioned is for the entire Okanagan region, and that the indicator will vary depending on home type and sub-region.
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