By Paul Vieira

OTTAWA-Canadian existing-home sales declined in May, or a fourth-straight month of lower transactions. House prices also weakened, and the number of homes on the market reached the highest level in nearly five years.

Falling sales for April and May, or the start of the historically busy spring real-estate season, signal either broad weakness among consumers, weighed down by higher borrowing costs; or a decision by would-be buyers to wait for meaningful interest-rate relief.

National existing-home sales fell 0.6% in May, according to the Canadian Real Estate Association's monthly data. Actual, or nonadjusted, monthly sales activity was 5.9% lower than the same year-ago month.

"May was another sleepy month for housing activity in Canada, although it may prove to be the last of those now that interest rates have moved lower," said Shaun Cathcart, an economist at the association. The Bank of Canada cut its main interest rate about two weeks ago, to 4.75% from 5%. Central bank officials said last week Canadians can expect more rate cuts in the months ahead so long as inflation continues to exhibit signs of slowing.

The number of new listings across the country rose 0.5% in May. Overall, there are now 4.4 months of residential real-estate inventory on the market, or the highest level since the fall of 2019.

The real-estate data indicated that benchmark house prices, calculated in a similar fashion to the S&P CoreLogic Case-Shiller National Home Price Index, fell in May, down 0.2% from April to 714,300 Canadian dollars, or the equivalent of $520,000. On a one-year basis, benchmark home prices fell 2.4%. Still, home prices are about 38% above 2019 levels.

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(END) Dow Jones Newswires

06-17-24 0943ET