Home Sales in Calgary, Edmonton and Vancouver Soar in September
Wednesday, October 23, 2013
It appears as though many Canadians were in the market to apply for a mortgage and buy a house during the summer's swan song.
According to newly published data from the Canadian Real Estate Association, home sales rose nearly 1 percent in September compared to the previous month. Additionally, on a year-over-year basis, home purchases rose more than 18 percent, not seasonally adjusted. Some of the most substantial gains were witnessed in Calgary, Edmonton, Vancouver as well as the Greater Toronto Area.
"Sales activity across much of the country has improved in recent months following a slow start to the year and new listings in some areas have not kept pace," said Laura Leyser, president of the CREA. "Depending on where they are, there may be a bit more competition among buyers for limited inventory in the months ahead."
Gregory Klump, CREA chief economist, indicated that home sales likely would have been even more robust, were it not for mortgage rules that tightened appreciably around this time last year.
Despite this, however, mortgage rates have remained in affordable territory, illustrated by the pace of mortgage demand and reports among banks that make mortgages available, according to statistical ratings organization and financial services firm Fitch Ratings.
"Canada's home-price index hit another record in August, suggesting that rising mortgage rates are not yet having a significant impact on overall housing market demand," Fitch Ratings indicated. "However, as affordability becomes a bigger issue for borrowers, we expect some additional pressure on mortgage origination volumes, and perhaps home prices in certain geographies, over the balance of the year and moving into 2014."
Before banking and other financial institutions approve a mortgage request, they take various factors into consideration, including credit history, employment and the down payment made. Home insurance traditionally needs to be purchased as well, which provides a guarantee to the lender that they'll be paid back.