Home resales fall on tighter mortgage rules
Reuters
10:02 AM, E.T. | May 17, 2011
Canadian, Real Estate
Sales of existing homes in Canada fell 4.4 percent in April from March as activity dropped off after a first-quarter rush to buy before the introduction of new mortgage rules.
The Canadian Real Estate Association (CREA) said on Tuesday that 36,564 homes changed hands in April, down from 38,263 in March.
The decline came as little surprise as tighter mortgage rules, which took aim at mortgage amortization and refinancing, came into effect early in the spring.
"Changes to mortgage regulations that took effect in April 2011 likely sidelined a number of first-time homebuyers," said Gregory Klump, CREA's chief economist.
Analysts predict the housing market will cool further in coming months because of the new rules and higher borrowing costs but that it won't drop as much as earlier forecast.
Last week, CREA lifted its 2010 national forecast for home resales to 441,100, a year-on-year decline of 1.3 percent.
The new estimate compares with the 1.6-percent year-on-year decline it forecast in February, which itself was revised up from an earlier forecast.
CREA said the national average price in April was up 8 percent from a year earlier at $372,544.
New listings edged up 1.3 percent in April from March. |
