Housing market shows signs of life, but it's too soon to celebrate a recovery

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It\u0027s premature to celebrate a housing market recovery because the rise in mortgage rates poses unexpected new risks for many. Read on.

However, a longer-term view of the data suggests October sales activity was below pre-pandemic levels. Indeed, last month’s sales were 15 per cent lower than the pre-pandemic, 10-year average for October, suggesting that escalating mortgage costs have done more harm than just reversing the pandemic-driven hype in housing sales.Article content

Nevertheless, the October sales and listing activity suggest the beginning of a market recovery. Sales were up and new listings in October rose 2.2 per cent from the month before. The increase in sales and new listings may be feeble, but these signs are positive and, in the absence of other unexpected shocks, could lay the foundation for a more robust recovery once buyers and sellers sitting on the sidelines decide to become active again.

 

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