Canadian home sales took a pause in December, dropping 5.8% from November, but the fourth quarter still marked a 10% increase over the third quarter, according to data released by the Canadian Real Estate Association (CREA).

The fourth-quarter performance ranked among the strongest in the past two decades, excluding the pandemic period. "The number of homes sold across Canada declined in December compared to a stronger October and November, although that was likely more of a supply story than a demand story," said Shaun Cathcart, CREA's senior economist.

Sales in December were up 19.2% compared to the same month in 2023. The home price index showed a slight monthly increase of 0.3% but dipped 0.2% year-over-year.

The Bank of Canada’s recent interest rate cuts—1.75 percentage points since June—have bolstered the housing market, bringing rates down to 3.25%. CREA anticipates a demand surge in spring 2025 as sellers return to the market.

"Our forecast continues to be for a significant unleashing of demand in the spring of 2025, with the expected bottom for interest rates coinciding with sellers listing properties for sale in big numbers once the snow melts," Cathcart noted.