Canada August Home Sales Rise on Decades-Low Mortgage Rates

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Canadian existing home sales rose 0.3 percent in August from the previous month, as the lowest mortgage rates since at least 1973 stoke demand.

Sales rose to 42,965 units last month, holding at about the five-year high set in May, the Canadian Real Estate Association said from Ottawa Tuesday.

The housing market is holding up, supporting Canada’s economy as it grapples with a drop in energy prices. The Bank of Canada cut interest rates twice this year to support incomes and spending, keeping mortgage rates at the lowest in decades.

“The continuation of low interest rates is supporting home sales and price trends, and is likely to keep doing so for some time,” CREA chief economist Gregory Klump said.

The Bank of Canada’s 5 Year Conventional Mortgage Rate Index has been at 4.64 percent since April, the lowest in records dating to 1973.

The realtor group also boosted its 2015 forecast for sales to 495,800 units on Tuesday, citing higher-than-expected strength in British Columbia and Ontario. The total would be a 3.3 percent gain from last year and the the second highest on record. In June CREA called for a 1.3 percent annual increase.

From a year earlier, sales rose 4 percent nationally and average prices climbed 8.7 percent to C$433,367 ($326,995). Sales rose and fell in about an equal number of cities, including a 0.7 percent increase in Greater Vancouver and a 0.3 percent decline in Montreal. Sales fell 0.8 percent in Toronto, the country’s biggest city.

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