Homebuyers experience less competition in May – TRREB

May home sales continued at low levels, especially in comparison to last spring’s short-lived pick-up in market activity, as homebuyers continued to wait for relief on the mortgage rate front. Existing homeowners are anticipating an uptick in demand, as evidenced by a year-over-year increase in new listings. With more choice compared to a year ago, buyers benefitted from more negotiating room on prices.

Clear signs

“Recent polling from Ipsos indicates that homebuyers are waiting for clear signs of declining mortgage rates,” says Toronto Regional Real Estate Board (TRREB) President Jennifer Pearce. “As borrowing costs decrease over the next 18 months, more buyers are expected to enter the market, including many first-time buyers. This will open up much needed space in a relatively tight rental market.”

Greater Toronto Area realtors reported 7,013 home sales through TRREB’s MLS system in May 2024 – a 21.7 per cent decline compared to 8,960 sales reported in May 2023. New listings entered into the MLS system amounted to 18,612 – up by 21.1 per cent year-over- year.

The MLS Home Price Index Composite benchmark was down 3.5 per cent on a year-over-year basis in May 2024. The average selling price of $1.16 million was down by 2.5 per cent over the May 2023 result of $1.19 million. On a seasonally adjusted monthly basis, the average selling price edged up slightly compared to April 2024.

Affordable and livable

“While interest rates remained high in May, homebuyers did continue to benefit from slightly lower selling prices compared to last year,” says TRREB Chief Market Analyst Jason Mercer. “We have seen selling prices adjust to mitigate the impact of higher mortgage rates. Affordability is expected to improve further as borrowing costs trend lower. However, as demand picks up, we will likely see renewed upward pressure on home prices as competition between buyers increases.”

“In order to have an affordable and livable region over the long term, we need to see a coordinated effort from all levels of government to alleviate our current housing deficit and to provide housing for new population moving forward,” adds TRREB CEO John DiMichele. “On top of this, governments need to ensure the delivery of infrastructure to support our growing population. The economic health and liveability of our region depends on the timely completion of public transit projects including better transparency and clear timelines on the completion of the Eglinton Crosstown LRT.”