BCREA reports over 35 percent dip in home sales as mortgage rates hit highest level since 2009

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      Home sales in B.C. continue to slow down amid rising mortgage rates.

      However, the average price rose last month compared to year-ago levels as the market remains in seller’s territory.

      The B.C. Real Estate Association reports that sales in May 2022 dropped 35.1 percent compared to the same month last year.

      The BCREA noted that the decline came as mortgage rates rose to the highest level since 2009.

      Chief economist Brendon Ogmundson noted in a report Monday (June 13) that the average five-year fixed mortgage rate in June 2022 reached 4.49 percent.

      Borrowers should expect higher rates to come.

      “Canadian mortgage rates continue to climb,” Ogmundson said.

      The Bank of Canada has indicated that interest rates need to increase some more in a bid to contain inflation in the country.

      The central bank has raised its interest-setting rate to 1.5 percent in June.

      It is widely anticipated that the BoC’s rate will increase to 2.75 percent by October 2022.

      In May 2022, realtors in B.C. sold a total of 8,214 homes.

      That’s 35.1 percent lower than the 12,664 sales in May 2021.

      In April 2022, sales totalled 8,939.

      Meanwhile, the average price in the province last month posted an annual increase of 9.3 percent.

      The average price reached $1,000,787, compared to $915,392 in May 2021.

      The average price in May 2022 declined from $1,065,000 in April.

      In May, the sales-to-active-listings ratio was 30 percent, which means that sellers remain the driver’s seat of the market.

      The sales-to-active-listings ration was higher at 48.2 percent in May 2021.

      A balanced market has a ratio of 12 percent to 20 percent.

      Meanwhile, listings are on the rise.

      The BCREA reported that active listings in the province were 4.4 percent higher than this time in 2021.

      The association noted that this was the “first year-over-year increase in active listings since 2019”.

      However, listings “still remain below what is typical for a balanced market”.