By Leah Schnurr
TORONTO, Feb 14 (Reuters) - Sales of existing homes in Canada fell in January for the fifth month in a row as unusually harsh winter weather discouraged potential house hunters, the Canadian Real Estate Association (CREA) said on Friday.
Sales activity was down 3.3 percent last month from December, data from the industry group for Canadian real estate agents showed.
Activity was 9.1 percent below 2013's peak hit in August, CREA said. Sales were down on a monthly basis in more than 60 percent of all local markets last month, including declines in the greater Toronto and Vancouver areas.
The frigid temperatures brought on by the so-called "polar vortex" dented both resale activity and new construction in January as prospective buyers deferred home purchases, the report said.
"A number of buyers likely waited out January's deep freeze before going house hunting," CREA President Laura Leyser said in a statement.
Nonetheless, the report underscored the view that Canada's housing market, which boomed coming out of the recession but cooled after the federal government tightened mortgage rules, should be softer but relatively stable this year as borrowing costs rise.
"While weather may have constrained sales activity in January, the slowdown is more emblematic of the broader theme of a soft landing in the existing home sales market," said Mazen Issa, senior Canada macro strategist at TD Securities in Toronto.
Although mortgage rates have slipped lower recently, the supply and demand fundamentals as well as stretched household balance sheets point to further softness, Issa said. Mortgage rates should also move higher as the U.S. Federal Reserve continues to reduce its economic stimulus program, he said.
Actual sales for January, not seasonally adjusted, edged up 0.4 percent from a year earlier.
The number of newly listed homes edged up 0.2 percent on a monthly basis. The number of months of inventory, which measures how long it would take to sell all homes on the market at the current activity pace, edged up to 6.4 months from 6.3 months in December.
The inventory measure indicates that the Canadian housing market remains well balanced, the report said.
CREA's home price index rose 4.8 percent from January last year, accelerating from December's 4.3 percent annual gain.
Price growth picked up in all property types tracked by the index, though two-story single family homes led the pack with a 5.6 percent yearly gain.
Calgary and the greater Toronto area saw the biggest price increases at nearly 9 percent and 7.1 percent, respectively.