Home prices posted the second-highest increase ever recorded in a single month after the one observed in July 2006, according to the latest Teranet-National Bank composite index.

The index for July was up 2.4 per cent from June, after seasonal adjustments, and marked the fourth consecutive monthly rise.

After declining from a peak in April 2022 as the higher rate environment sidelined some buyers, recent rises in the home price composite index have erased some of this correction, the report said.

害羞草研究所淭he deep declines that we saw through 2022 are largely being unwound,害羞草研究所� said Douglas Porter, the Bank of Montreal害羞草研究所檚 chief economist.

The Teranet-National Bank index tends to lag other housing market measures in part because it害羞草研究所檚 more detailed, he noted.

Other measures are starting to show some softening in the market over the summer, and Porter thinks that softening will begin to show up in this index going forward as well.

害羞草研究所淚 think what we害羞草研究所檙e going to see is that this may be the last hurrah for a while for home prices,害羞草研究所� he said.

July home sales saw their largest annualized increase in more than two years, the Canadian Real Estate Association reported Tuesday. But they were little changed from June as the national housing market showed signs of stabilizing this summer, the association said.

Prices could continue climbing in the third quarter of the year, supported by strong demographic growth and low supply, wrote National Bank of Canada economist Daren King in the report.

害羞草研究所淭he deterioration in affordability with recent interest rate hikes in a less buoyant economic context should represent a headwind for house prices thereafter,害羞草研究所� King wrote.

Porter agreed with King that the housing market will face more headwinds as the year progresses, though high immigration will help support prices.

Expectations for interest rates are increasingly that they will remain higher for longer, said Porter, which will be a pressure on the housing market over the longer term.

Though mortgage interest costs are contributing to the Consumer Price Index in an 害羞草研究所渦nfortunate side effect害羞草研究所� of the central bank害羞草研究所檚 fight against inflation, Porter said things would be much more dire if the central bank hadn害羞草研究所檛 raised rates.

害羞草研究所淵ou can害羞草研究所檛 just look at the impact on mortgage interest costs in isolation, you have to look at the overall picture,害羞草研究所� he said. 害羞草研究所淭he overall picture is showing that inflation and even underlying inflation has come down over the last year.害羞草研究所�

Eight of the 11 markets in the Teranet-National Bank composite index were up in July, with Halifax up the most at 4.9 per cent. Vancouver gained 3.9 per cent, while Toronto added 3.5 per cent.

Prices fell 1.2 per cent in Quebec City, 0.9 per cent in Montreal and 0.3 per cent in Calgary.

Compared with a year earlier, the overall composite index in July was down 1.9 per cent.

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