The American housing market continued its dramatic turnaround in June as national median house prices hit an all-time high, according to the Washington D.C.-based National Association of Realtors.
The U.S. recovery comes as Canadian prices on a national level show no signs of slowing down, albeit mostly buoyed by the strength of the country’s two most expensive markets, Toronto and Vancouver.
“We are at completely opposite points in the (housing) cycle,” said David Madani, Canada economist of Capital Economics, who likens the current Canadian market to the U.S. market just before the dramatic housing meltdown in 2007 that drove down prices as much as 50 per cent in some American cities.
Those days appears to be long gone for the U.S., which saw existing home sales hit a seasonally adjusted annualized rate of 5.49 million last month – the best monthly performance for U.S. housing since February, 2007.
The U.S. median existing home price reached $236,400 in June, a 6.5 per cent jump from a year ago. That price also passed the median peak reached in July, 2006, of $230,400, although that does not factor in inflation during the period.
“They hit their bottom and obviously they are trying to come back up. In Canada, it’s really only Toronto and Vancouver that is holding up most of the country,” said Madani, who thinks the longer the boom goes in the country’s most expensive cities, the greater the bust will be.