T
he Canadian Real Estate Association (CREA) has revised its forecast for home sales and prices, citing a shift in the expected pace of interest rate cuts. Initially, CREA anticipated a multi-year path to a "neutral" interest rate, but now expects the Bank of Canada to reach this level by next spring or summer.

    The market's slow response to initial interest rate cuts has led CREA to reassess its forecast. The type of buyer who typically enters the market with a three-year fixed-rate mortgage may be holding off for better rates expected in the near future. As a result, sales are expected to remain stagnant until next spring, when a sharper rebound is anticipated.

    For 2024, CREA forecasts 468,900 residential properties will trade hands via Canadian MLS Systems, a 5.2% increase from 2023. This represents a slight downward revision to sales this year and next, but with potential for stronger momentum in 2025Q2. National home sales are forecast to climb 6.6% to 499,800 units in 2025 as interest rates continue to decline and demand returns.