The national housing market may be slowing down, but the Canadian Real Estate Association does not believe a strong, economy-disrupting correction will occur, reports the Hamilton Spectator.
In their latest forecast, CREA forecasted that sales volumes would continue their uptick this year, rising to 463,700 units. This would represent a 1.3 per cent gain from last year, although that figure is well below the association's December 2013 prediction.
CREA adds that 2014 began slowly, despite existing home sales showing a 0.3 per cent increase in February, as compared to the rise observed in January. Year over-year, home sales have grown by 1.9 per cent.
Many market analysts have warned of an impending crash, but CREA chief economist Gregory Klump believes that these comments are off-base. In an interview, he said he expects sales to increase in the springtime, with moderately rising mortgage rates to cause a slight decrease in affordability in the second half of 2014.
However, the higher rates will likely be a good indicator of a stronger economy.
“Marginally higher mortgage rates are likely to counterbalance the lift provided by stronger economic and continuing job growth, and restrain the momentum of sales activity,” Klump said.
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