{"id":3006,"date":"2021-08-18T17:03:40","date_gmt":"2021-08-18T21:03:40","guid":{"rendered":"https:\/\/canadianlending.ca\/investors\/?p=3006"},"modified":"2023-05-17T16:21:55","modified_gmt":"2023-05-17T20:21:55","slug":"cmi-state-of-the-market-home-sales-continue-to-normalize-in-july","status":"publish","type":"post","link":"https:\/\/staging.canadianlending.ca\/investors\/cmi-state-of-the-market-home-sales-continue-to-normalize-in-july\/","title":{"rendered":"CMI State of the Market: Home Sales Continue to Normalize in July"},"content":{"rendered":"

Housing market activity in Canada continued to moderate in July, though underlying demand and sales activity were robust when compared with the historical average. Home builders reported a substantial increase in construction costs, which may contribute to rising house prices in the future.<\/span><\/p>\n

 <\/p>\n

National Home Sales Moderate Further in July<\/b><\/p>\n

National home sales declined 3.5% in July, marking the fourth consecutive monthly decline, according to the Canadian Real Estate Association (CREA). The July figure represented the smallest decline during the four-month downtrend. Declines were led by Edmonton and Calgary, whereas Montreal experienced a slight uptick in sales.\u00a0<\/span><\/p>\n

Home sales are down a cumulative 28% from the March peak, although overall activity remains elevated compared with the long-term average. As CREA reports, home sales are well above the 10-year monthly moving average.<\/span><\/p>\n

\"\"<\/p>\n

Home sales have moderated substantially from their March peak. However, underlying market conditions remain healthy. | Source: <\/i><\/b>CREA<\/i><\/b><\/a><\/p>\n

The MLS Home Price Index rose 0.6% during the month and was up 22.2% year-over-year.<\/span><\/p>\n

 <\/p>\n

Residential Construction Shows Signs of Cooling<\/b><\/p>\n

Residential construction investment rose to record highs in the second quarter, as homebuilders continued to accommodate surging housing demand across the country. In the second quarter, residential construction investment reached $43.4 billion, surpassing $40 billion for the first time, according to Statistics Canada. However, in June, investment decreased by 5.8% to $13.8 billion following a 3% decline in May. Despite the declines, residential construction investment remains well above year-ago levels.\u00a0<\/span><\/p>\n

Declining home sales in places like Toronto and a surge in material costs may have had a negative impact on housing starts. The Canadian Home Builders\u2019 Association reported that 80% of builders have experienced an increase in lumber costs of $20,000 per home; 30% say they faced increases of over $40,000 per property.<\/span><\/p>\n

 <\/p>\n

Labour Market Recovery Continues<\/b><\/p>\n

The Canadian labour market improved for a second consecutive month in July, as employers welcomed back 94,000 workers, according to Statistics Canada. The unemployment rate declined 0.3 percentage points to 7.5%. The most positive takeaway from the report was that, unlike in June, July\u2019s employment growth was concentrated in full-time work.<\/span><\/p>\n

Canada\u2019s employment picture is improving as most provinces gradually loosen their shelter-in-place orders. It remains to be seen whether these trends will be sustained during a fourth wave of COVID-19 infections.\u00a0<\/span><\/p>\n

\"\"<\/p>\n

Following back-to-back monthly declines, national employment rose in June and July. | Data source: <\/i><\/b>Statistics Canada<\/i><\/b><\/a><\/p>\n

 <\/p>\n

Stocks Hover Near All-Time Highs<\/b><\/p>\n

Wall Street and Canadian stocks have maintained their upward trajectory into August, as the major indexes continued to flirt with record highs. Despite a moderate pullback, Toronto\u2019s TSX Composite Index remains firmly above 20,000 \u2013 a level it first breached in June of this year.\u00a0<\/span><\/p>\n

Markets are rallying on positive second-quarter earnings surprises and affirmation from policymakers that the post-pandemic recovery will continue to be supported by lower interest rates.<\/span><\/p>\n

\"\"<\/p>\n

Risk sentiment remains positive as stocks hover near all-time highs. | Source: <\/i><\/b>barchart.com<\/i><\/b><\/a><\/p>\n

 <\/p>\n

Conclusion and Summary<\/b><\/p>\n

National surveillance of the COVID-19 pandemic indicates that a fourth wave is underway in Canada, according to chief public health officer Dr. Theresa Tam.<\/span> Most provinces have registered an increase in positive COVID-19 cases, though an upsurge in vaccinations is raising optimism that another lockdown could be avoided. A full reopening of the economy is needed for Canada to sustain its post-pandemic recovery.\u00a0<\/span><\/p>\n

 <\/p>\n

What Happens Next?\u00a0<\/b><\/p>\n

The CMI Financial Group will continue to analyze market changes and keep you updated on a regular basis. Visit our website to learn more.<\/span><\/p>\n

Learn more<\/a>\u00a0about investing in private mortgages.<\/p>\n","protected":false},"excerpt":{"rendered":"

Housing market activity in Canada continued to moderate in July, though underlying demand and sales activity were robust when compared with the historical average. Home builders reported a substantial increase in construction costs, which may contribute to rising house prices in the future.   National Home Sales Moderate Further in July National home sales declined … <\/p>\n

Continue reading “CMI State of the Market: Home Sales Continue to Normalize in July”<\/span><\/a><\/p>\n","protected":false},"author":12,"featured_media":3007,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[87],"tags":[],"class_list":["post-3006","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market-research"],"yoast_head":"\nCMI State of the Market: Home Sales Continue to Normalize in July - Investors | Real Estate Secured Mortgage Investments<\/title>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CMI State of the Market: Home Sales Continue to Normalize in July - Investors | Real Estate Secured Mortgage Investments\" \/>\n<meta property=\"og:description\" content=\"Housing market activity in Canada continued to moderate in July, though underlying demand and sales activity were robust when compared with the historical average. 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