Canada Mortgage and Housing Corp. says it expects home sales and the pace of price growth for them will remain elevated this year, but ease from their highs of 2021.
The national housing agency says improving levels of employment and immigration are expected to be key factors, as the impact of pandemic restrictions continue to ease.
In its housing market outlook, CMHC says it expects home sales and price growth will fall more in line with historical averages by late 2023 or early 2024, however it says elevated prices will persist since price growth will remain positive.
It says home ownership affordability will decline with rising mortgage rates and with the growth in prices expected to outpace income growth.
CMHC also says housing starts will moderate from 2021 highs but remain above historical averages.
Mortgage rates are expected to rise as the Bank of Canada raises its key interest rate target in an effort to bring inflation under control. The central bank raised its policy interest rate by half a percentage point to 1.0 per cent last week and warned more rate hikes are coming.