blog post 10

Home sales dip in October as market cools since hot summer

Last month, Canadian home resales dipped for the first time since February, and many see this as a signal that a so-called correction in the housing market remains in place. The Canadian Real Estate Association reported Friday that the number of transactions fell 3.2 per cent in October from September on a seasonally adjusted basis. That still leaves an 8.3 per cent increase from October 2012, when sales were dipping following to a tightening of federal mortgage rules in July of that year. Analysts say the monthly results, while only a snapshot, suggest that the underlying market is soft and that fears of a bubble, voiced during the summer’s strong housing rally, were exaggerated. October’s month-over-month dip can also be evidence that the recent sales spurt came largely from homebuyers with pre-approved mortgages jumping into the market before rates headed higher. Some analysts believe with prices so high, Canada may be due for a sharp correction in prices. However, that scenario has yet to materialize. Soft-landing proponents argue that the two markets are very different because regulations in Canada require a greater degree of equity held by homeowners, high-leverage purchases must be insured, and financial institutions are more prudent in their lending practices.
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References:

http://www.ctvnews.ca/business/home-sales-dip-in-october-as-market-cools-since-hot-summer-1.1544674