There’s no big economic data out today, but news that new housing prices are easing should sooth fears of inflation.

“The new house price index, seldom a market mover but closely watched by the Bank of Canada, rose just 0.1% in March,” says RBC Financial. “This was much lower than consensus estimates of a 0.4% increase.” Year over year, the index is up 4.8%. This is down from the 5.1% rate that has prevailed over the past three months.

“The slower pace of price gains will come as welcome relief to prospective homebuyers who have faced sharply rising home prices over the past year. These sharp increases have been particularly evident in the resale housing market and reflect tight market conditions where supply has been hard-pressed to keep up with the robust pace of housing demand all across Canada,” RBC says. “However, even in the resale market, the rapid pace of price appreciation is expected to cool in the ensuing months as an increase in supply helps to restore some balance to overall market conditions.”

“The more moderate price gains in today’s new home price index also suggests the same and should somewhat sooth the Bank of Canada’s inflationary fears, increasing the odds of a “no hike” decision at its June meeting,” it concludes.

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