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Sellers are returning to Canada’s housing market — in some cases, in droves.

New listings were up 5.6 per cent in July from the month before, an increase of 24 per cent since April, reversing declines earlier this year, said RBC economists Robert Hogue and Rachel Battaglia.

Though it won’t become clear for a few months whether the surge is investors timing the markets or homeowners selling to escape higher mortgage costs, the jump is the fastest rise in new listings outside of the pandemic and suggests a shift in sentiment, said Desjardins economist Marc Desormeaux.

The increase in some markets was striking. Listings were up more than 28 per cent in Saguenay, Que., 21 per cent in Kitchener-Waterloo and almost 20 per cent in London, Ont., though RBC points out the increases are coming from exceptionally low levels.

At the same time buyers are pulling back from the market.

Home sales slipped 0.7 per cent nationwide in July from the month before, the first decline in six months as the Bank of Canada’s resumption of rate hikes put a lid on the housing market’s spring rebound.

With the average five-year fixed mortgage rate at a post-financial crisis high of 5.84 per cent, potential home buyers are holding back, said Capital Economics. The average variable rate is at almost 7 per cent.

Not all markets saw declines. While sales fell 11 per cent in the Fraser Valley, B.C. and 8.7 per cent in Toronto, they increased in Ontario’s more affordable markets such as London, Niagara and Windsor, said RBC. Sales also rose in Quebec, the prairie provinces and parts of Atlantic Canada.

However, in British Columbia and Ontario the tight supply-demand conditions seen in the spring  are unwinding quickly, said the economists.

“Softer sales and increasing new listings returned most markets in these provinces to balance, with Toronto the closest it’s been to a buyer’s market since January.”

The good news is that prices continue to rise in most regions, though the pace of increases has eased. Nationally, the MLS Home Price Index ticked up 1.1 per cent from the month before, but that increase is down from an average 1.9 per cent rate in the previous three months, said RBC.

After the surprisingly strong rebound in the spring, Canada’s housing market is expected to continue to weaken.

“The path ahead for Canada’s market is likely to be bumpy,” said the RBC economists.  “We expect higher interest rates to keep curbing buyers’ enthusiasm for months to come, while possibly forcing the hand of some current owners to sell.”

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Jackson Hole, Wyoming, is where the action is this week, when the Federal Reserve holds its annual symposium. “Structural Shifts in the Global Economy” is the official theme of this year’s retreat for central bankers, but all eyes will be on chairman Jerome Powell when he speaks Friday morning. Recently published minutes of the Fed’s July policy meeting showed officials still see a significant risk of inflation, suggesting more rate hikes might be necessary. Since then data readings have both supported and negated that argument  so investors will be looking for more clarity from Powell. As today’s chart shows Jackson Hole has the potential to be a big market mover, but Derek Holt of Scotiabank Economics expects there will be more questions than answers out of this year’s gathering.

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Life expectancy is a huge factor in determining when to start drawing down on your registered investments and government benefits, says certified financial planner Andrew Dobson. He has some other advice for a 61-year-old married woman who isn’t expecting to live more than five years. Get the answer

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Today’s Posthaste was written by Pamela Heaven, @pamheaven, with additional reporting from The Canadian Press, Thomson Reuters and Bloomberg.

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