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CREA lowers home sales forecast, but nudges average price higher

Last Updated Sep 15, 2021 at 12:20 pm EDT

FILE - A for sale sign stands in front of a house, Tuesday, Oct. 6, 2020, in Westwood, Mass. The long period of ultra-low rates on home loans may be over. Long-term bond yields, which can influence interest rates on mortgages, have climbed this month amid expectations of ramped-up U.S. government stimulus spending, economic growth and higher inflation. (AP Photo/Steven Senne, File)

OTTAWA — The Canadian Real Estate Association is forecasting the country will wrap the year with fewer home sales than it previously predicted as it says tight supply conditions will continue to push housing costs up.

The association is forecasting about 656,300 homes will change hands this year, an almost 19 per cent increase from 2020 levels, but an almost four per cent decrease from the 682,900 it predicted earlier this year.

The association says the record-setting number it is predicting is a downward revision because sales fell more rapidly than predicted this spring.

CREA says the the national average home price is now expected to reach $680,000 this year, up 19.9 per cent from last year. The earlier forecast had predicted an average price of nearly $678,000 for 2021.

Canadian home sales are forecast to fall by 12.1 per cent to around 577,000 in 2022, while prices are expected to rise by 5.6 per cent on an annual basis to reach about $718,000 next year.

The new forecast came as CREA says month-over-month home sales edged back by 0.5 per cent to 48,379 in August. Compared with a year ago, home sales last month were down 14 per cent.

This report by The Canadian Press was first published Sept. 15, 2021.

The Canadian Press