OTTAWA, Oct 16 (Reuters) - Canadian home sales extended their decline in September, after a drop in August, as higher mortgage rates and expectations of a Bank of Canada rate hike dampened activity, the Canadian Real Estate Association said in its monthly note on Friday.
National home sales declined 2.3% month-over-month in September following a drop of 0.7% in August.
Sales were down 7.7% on an annual basis, without seasonal adjustment.
The industry group's Home Price Index was down 0.4% on a monthly basis and was down 3.4% from a year ago.
After a rebound in August, the number of newly listed properties fell by 1.8% on a month-over-month basis.
The seasonally adjusted sales-to-new listings ratio for residential category slipped to 48.8% from 49.1% in August, moving further below the long-term average of 54.7%.
"This was hardly surprising given the latest jump in fixed mortgage rates, and with the Bank of Canada now widely expected to follow with a rate hike before the end of the year,” said Shaun Cathcart, CREA’s senior economist said in a note about the drop in home sales.
The BoC is not expected to raise interest rates at its next monetary policy decision announcements on October 28, but money markets are pricing in a rate hike of 25 basis points in December.
Reporting by Promit Mukherjee
