Canadian home sales fall in February, average price down; CREA updates outlook

The average price for homes sold last month was down 5.2% from last year as the number of sales dropped to a 10-year low for the seasonally weak month of February, the Canadian Real Estate Association reported Friday.

The national association highlighted the impact of a mortgage stress test that affects federally regulated lenders, including the big banks, but some analysts said February's drop may be due in part to severe winter weather.

"February home sales declined across a broad swath of large and smaller Canadian cities,'' CREA chief economist Gregory Klump said Friday in a statement.

CREA said February sales by its members fell 4.4% compared with the same month last year. That is the lowest level for the month of February since 2009 and almost 12% below the 10-year average for the month.

On a month-over-month basis, national home sales in February were down 9.1% compared with January for the lowest level since November 2012. 

It's the biggest month-over-month drop since the mortgage stress test came into effect in January 2018.

The new stress test requires borrowers to prove that they can service their uninsured mortgage if lending rates go above a certain threshold.