Canadian home sales down 0.6 per cent from year ago, prices up 4.8 per cent

Home sales last month were down 0.6 per cent from a year ago, but up 3.3 per cent when compared with May, according to data released by the Canadian Real Estate Association on Monday.

The increase compared with the previous month came as interest rates for fixed mortgages also crept higher.

“Increases in mortgage interest rates likely prompted some buyers with pre-approved mortgages to jump off the sidelines and into the market in June,” said Gregory Klump, chief economist of the Canadian Real Estate Association, in a statement.

“If fixed mortgage rates continue holding where they are or edge slightly higher, sales may ebb over the summer and early autumn.”

The association said home sales improved in two-thirds of the markets it tracks compared with May with the biggest gains in Victoria, Vancouver, the Fraser Valley, Edmonton, Saskatoon, Winnipeg and Montreal.

When compared with a year ago, Toronto and Montreal were lower, while Vancouver, Calgary, and Edmonton were up compared with last June.

Despite the overall drop in sales from June 2012, the national average sale price last month was up 4.8 per cent from a year ago.

The number of newly listed homes were down 0.5 per cent on a month-over-month basis in June.

The association said some 240,068 homes have sold in Canada through its MLS system so far this year, down 6.9 per cent from the first half of 2012.

Robert Kavcic, a senior economist at the Bank of Montreal (TSX:BMO), said sales have returned to levels seen before Jim Flaherty tightened mortgage rules a year ago.

“The recent upward move in mortgage rates could temper recent sales gains through the summer, but the bigger picture is still one of a balanced and well-behaved housing market,” Kavcic said in a note.