Canada’s housing market saw a slight increase in sales in June, according to the Canadian Real Estate Association (CREA), but activity remains subdued, with the Bank of Canada’s 25 basis point cut doing little so far to spur significant demand.

CREA said in a news release on Friday that home sales rose 3.7 per cent from May to June. On an annual basis, home sales were down 9.4 per cent last month.

CREA says the not-seasonally adjusted national average home price in June was $696,179, down 0.4 per cent compared to May and 1.6 per cent compared to the same time last year. CREA’s Home Price Index, which the industry group says is a more accurate price comparison than the median or average price, increased 0.1 per cent from May to June, the first monthly gain in 11 months.

“All told, the resale housing market was subdued across much of the country in June, with little major response to the initial rate cut of this cycle,” BMO senior economist Robert Kavcic wrote in a research note on Friday.

“For the Bank of Canada, this will be considered good news as the market is not standing in the way of further easing at this point. For homebuyers, the path back to ‘affordability’ remains slow on a national scale, and families continue to move to find it.”

The Bank of Canada cut interest rates for the first time in more than four years last month, bringing its benchmark rate to 4.75 per cent. Royal LePage noted in a report released on Thursday that the response to the central bank’s 25 basis point cut was “tepid.”

The number of newly listed properties increased 1.5 per cent on a monthly basis, CREA said, led by jumps in the Greater Toronto Area and British Columbia’s Lower Mainland, bringing the number of properties listed for sale to about 180,000 in June. While that is up 26 per cent from last year, CREA says it is still below historical averages of around 200,000 for this time of year.

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With sales outpacing the number of new listings, the national sales-to-new listings ratio tightened from 52.8 per cent in May to 53.9 per cent in June. CREA says a ratio of between 45 and 65 per cent generally represents a balanced market.

“It wasn’t a ‘blow the doors off’ month by any means, but Canada’s housing numbers did perk up a bit on a month-over-month basis in June following the first Bank of Canada rate cut,” CREA senior economist Shaun Cathcart said in a statement. He notes that the year-over-year comparisons “don’t look great” as many buyers were still jumping into the market this time last year.

“What’s happening right now is that sales were up from May to June, market conditions tightened for the first time this year, and prices nationally ticked higher for the first time in 11 months.”

In fact, TD economist Rishi Sondhi wrote in a research note that the modest increase in benchmark prices “could be a harbinger of improved activity ahead.”

“Indeed, we think that markets will be stronger in the back half of the year, as the economy holds up and more meaningful interest rate relief is delivered. However, stretched affordability conditions will likely limit the degree of improvement,” Sondhi wrote.

Still, CREA scaled back its housing market forecast for the remainder of the year amid increased levels of supply and a quiet spring spurred by fewer interest rate cuts expected in 2024. The association says it anticipates a gradual rebound in the national housing market, with 472,395 properties forecast to trade hands this year to mark a 6.1 per cent increase from 2023 — down from its forecast in April of a 10.5 per cent gain.

With files from The Canadian Press

Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.

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