In May 2024, Toronto home sales saw a notable decline as buyers hesitated to enter the market, awaiting potential mortgage rate relief. The Toronto Regional Real Estate Board (TRREB) reported a drop in sales volumes compared to previous months, continuing a trend that has been observed since the start of the year.
High borrowing costs are a significant factor contributing to the slowdown. With mortgage rates elevated, many potential buyers are finding it challenging to afford new homes, prompting them to stay on the sidelines​​. This cautious approach is expected to persist until there is clear indication of rate cuts, which experts predict could happen later in the year​​.
In April 2024, new listings surged by 49% compared to the same period last year, reaching their highest level for an April since 2018. However, the increase in listings did not translate into higher sales, as the number of transactions hit its lowest point for April since 2020​​.
Despite the drop in sales, some areas within the Greater Toronto Area (GTA) experienced varying trends in home prices. For instance, while the average home price in the City of Toronto increased slightly on a monthly basis, other regions like Brampton and Mississauga saw mixed results​.
Market analysts believe that any future interest rate cuts could reinvigorate the market, making mortgages more affordable and encouraging buyers to return. However, significant improvements in housing affordability are not expected until multiple rate cuts are implemented​.
Overall, the Toronto housing market remains in a state of flux, with both buyers and sellers adopting a wait-and-see approach as they anticipate potential changes in mortgage rates later this year.
Comments