1mo ago

New home prices see the largest month-over-month decline in 15 years

www150.statcan.gc.ca The Daily — New Housing Price Index, October 2024

On a monthly basis, the New Housing Price Index (NHPI) fell 0.4% in October, the largest monthly decline since April 2009. However, the picture was mixed across the country, as prices were down in 9 out of 27 census metropolitan areas (CMAs) surveyed, but unchanged in 11 CMAs and up in the remaining...

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Maybe I'm stupid, but "home prices" today mean very little when they can become unaffordable when mortgage rates, property taxes, and utilities inevitably climb to beyond someone's ability to afford it.
- Prices still aren't affordable despite this % decline.
  
  I agree. But things can get out-of-control unaffordable from year to year when you own a home and the expenses along with it.
- eyup. I think a lot of people do not realize how you are not home free with no monthly nut just because you own something.

In order for home prices to actually become affordable, we'd have to have the kind of decline where economists were literally using phrases like "blood in the streets".

Let me know when prices are close to where they were 15 years ago.
- That will take Dr. Emmet Brown and a heavily modified Delorean.

I wonder if that had anything to do with the Bank of Canada cutting interest rates in October. People waiting for a better mortgage rate perhaps?
- If anything cutting rates would lead to increase in housing prices. New home price decline is in line with existing home price trends as well so this could be an indication of demand pressure softening.
  
  So many factors.
  Sellers may have sat on the sidelines when rates went up and sales went down. As inventory climbs, pressure grows and prices come down. Declining prices can scare sellers who come off the sidelines before prices come down further. Rates and prices coming down brings back buyers which drives up prices. Which forces dominate in any given month? For how long? No easy answers in advance.
  
  I was thinking more along the lines of people waiting on buying homes until interest rates fall which is a decrease in demand.

19 comments