Canadian resale housing market improves modestly in Feb

Following three disappointing months, the Canadian housing market showed signs of improvement in February. Existing home sales inched up 1.0% in February, up 2.7% from last year.  But the level remained 5% below the 10-year average.

Listings fell in the month, pushing the sales-to-listings ratio back up to 52.5, from 50.2 in the month prior.  A sales-to-listings ratio between 40 and 60 indicates a balanced market.

TD Economics notes in a report on Friday:

• This  morning's data release painted a picture of an overall Canadian housing market that is neither too hot, nor too cold. As was largely expected, the 60% plunge in oil prices since the summer has hit commodity-dependent markets quite hard, while major cities in Ontario and British Columbia are benefiting from a new low in interest rates. With both markets relatively tight, home price gains, especially for single-family homes, will likely maintain some momentum over the next few months.
  
  
• While low interest rates may continue to provide a modest boost to housing demand over the near-term, the impact is likely to fade as 2015 unfolds.  Meanwhile, the combination of an increase in the unemployment rate in Feb, elevated household indebtedness and a deterioration in affordability in Canada's key markets will keep a lid on overall housing activity for most of 2015.