The Canadian Real Estate Association has scaled back its housing market forecast due to “another quiet spring,” says the realtors group.

“Since CREA’s last forecast in April, expectations around interest rate cuts this year have been dialled back,” said Ottawa-based CREA in a news release.

Supply has also increased more than expected as large numbers of sellers came to the market with properties for sale in the spring while buyers remained on the sidelines.

“While lower interest rates are still expected to gradually bring buyers back into the market going forward, a slow spring market this year along with growing levels of supply has resulted in a downward revision to the forecast for both sales and average home prices,” said CREA.

The group expects 472,395 residential properties to trade hands via Canadian MLS systems in 2024, a 6.1% increase from 2023.

CREA said the national average home price is forecast to climb 2.5% on an annual basis to $694,393 in 2024.

Nationally, home sales are forecast to rise an additional 6.2% to 501,902 units in 2025 as interest rates continue to decline and demand continues to flow back off the sidelines.

Canada’s average home price is forecast to rise 5% from 2024 to $729,319 in 2025.

CREA’s move comes after Royal LePage reported that the Bank of Canada’s overnight interest-rate cut to 4.75% from 5% in early June has not produced the expected rush of buyers back into the market.

On the same day that it scaled back its forecast, CREA reported that sales declined 9.4% year-over-year in June on an actual basis, while the actual average sale price declined 1.6% to $696,179 from June 2023. But prices were up on a seasonally-adjusted basis.

Home sales increased 3.7% month-over-month in June 2024. Despite lowering its sales forecast, CREA said the June market activity showed some “early signs of renewed life” following the BoC rate cut. More cuts are expected this year and in 2025.

“It wasn’t a blow-the-doors-off month by any means, but Canada’s housing numbers did perk up a bit on a month-over-month basis in June following the first Bank of Canada rate cut,” said Shaun Cathcart, CREA’s senior economist, in a news release. “Year-over-year comparisons don’t look great mainly because of how many buyers were still jumping into the market last spring, but that’s a story about last year.

“What’s happening right now is that sales were up from May to June, market conditions tightened for the first time this year, and prices nationally ticked higher [on a seasonally-adjusted basis] for the first time in 11 months.”

New listings increased 1.5% nationally in June as the Greater Toronto Area and B.C. Lower Mainland led the way.