February 8, 2024 | Buying

The report on the housing market in January 2024 shows a positive start, with an annual increase in home sales as compared to January 2023. This increase is great news for homebuyers as the lower borrowing costs associated with fixed-rate mortgage products made it possible for them to own a home. Although the new listings were up year-over-year, they were up at a lesser annual rate compared to sales, resulting in tighter market conditions. This indicates that the market is moving towards renewed price growth as we move into the spring market.

The Bank of Canada predicts that the rate of inflation will decrease as we move through the year, which would support lower interest rates. This is great news for first-time buyers currently facing high average rents, as lower mortgage rates would make the move to homeownership more affordable.

In January 2024, 4,223 sales were reported through the Toronto Real Estate Board’s (TRREB) MLS® System, which is an increase of more than one-third compared to January 2022. The fact that the number of new listings was up year-over-year indicates a healthy real estate market.

On a month-over-month seasonally adjusted basis, both sales and new listings were up, which is a positive sign for the market. However, sales increased more than listings, which means market conditions tightened relative to December 2023.

The Bank of Canada is expected to start cutting its policy rate, likely in the second half of 2024, which may result in increased home sales. This will also increase competition between buyers, but with the right guidance from professionals, homebuyers can make informed decisions.

The MLS® Home Price Index Composite in January 2024 was down by less than 1% year-over-year. The average selling price was down by 1% year-over-year to $1,026,703. The lower prices make it easier for first-time buyers to enter the market.

Although there are policy issues that need to be addressed, we can still celebrate the good news from the housing market. Lower borrowing costs and lower interest rates have made it possible for more people to own homes. There is also a focus on building 1.5 million new homes, which will increase the supply of homes and make the market more accessible to everyone. The government should also continue to support first-time homebuyers to ease movement across the entire spectrum and relieve pressure on the rental market.