A look at the summer housing market and beyond

Looking at the months ahead, current market conditions will likely remain, as buyers re-evaluate affordability and adjust to rising mortgage rates. Despite higher borrowing costs, as with other market cycles, we will see some buyers re-enter the market as conditions stabilize. New listings of homes and condos are an important indicator to watch and are key to understanding how tight market conditions are now and will be in the future. Fundamental supply shortages remain, and increasing immigration, coupled with buyers adjusting to higher borrowing costs, will illustrate this going forward.

Unemployment rates are currently at historic lows, and despite media headlines to the contrary, the majority of households are not in a position where they need to sell their home. If would-be sellers decide to take a wait-and-see approach over the next few months, it is possible that active listings could trend lower. This could cause market conditions to begin to tighten again, providing further support for home prices.

One thing is certain – our region continues to grow because we attract people and businesses from all around the world. Every one of these people will require a place to live, whether they choose to buy or rent. Despite the shorter-term impact of higher borrowing costs, housing demand will remain strong over the long term.

BREAKING DOWN THE HOUSING MARKET IN JUNE

In June 2022, home sales were down compared to last year’s strong result. Prices were also down on a monthly basis.

The number of home sales in June was down by 41 per cent over the high in 2021. Unprecedented quick increases in borrowing costs are presenting affordability challenges to prospective homebuyers and pushing some to reconsider when to purchase a home. For buyers who can afford higher borrowing costs, some have put their decision on hold to see how prices respond.

Home sales in June were down when compared to May 2022, which is often the case due to the seasonal nature of the market. Demand normally slows as we approach the summer months, especially with travel resuming.

While the number of sales was down from last year, new listings changed little over the same period. This has provided for more balance in the market.

When it comes to the cost of a home, the average selling price was $1.14 million, which despite prices trending down on a monthly basis, is up when compared to June 2021. Townhomes and condos have presented the strongest price growth year-over-year.

As always, stay up to date on the real estate market by visiting trreb.ca. Discover our monthly Market Watch report. We break down prices, sales and new listings across the Greater Toronto Area. You can also connect with a TRREB member realtor and search listings in real time on any device.