(OTTAWA) The Canada Mortgage and Housing Corporation expects home sales and the pace of home price growth to remain strong this year, but to ease from their 2021 highs.
Posted at 1:09 p.m.
Updated at 1:09 p.m.
The federal housing agency says improving employment and immigration levels should be a key driver as the impact of pandemic-related restrictions continues to ease.
In its housing market outlook report, CMHC says it expects home sales and price growth to approach historical averages by the end of 2023 or the beginning of 2024, but adds that the high prices will persist since their growth will remain positive.
CMHC says the affordability of homeownership will decline due to rising mortgage rates and rising prices, which are expected to outpace rising incomes.
Housing starts are expected to slow from 2021 highs but remain above historical averages, CMHC added.
Mortgage interest rates are expected to rise as the Bank of Canada raises its key interest rate target in an effort to control inflation. The central bank raised its key rate by half a percentage point to 1.0% last week, and warned that more rate hikes were to come this year.