(Bloomberg) -- Toronto home prices rose for the first time in seven months as buyers and sellers navigated a shifting market ahead of a traditionally busy time of year.

The benchmark price of a home in Canada’s largest city climbed 0.2% to C$1.09 million ($803,000) in February from a month earlier, the first monthly increase since July, according to a report released Tuesday by the Toronto Regional Real Estate Board. But transactions fell after climbing for the past two months and new listings were relatively flat, the seasonally adjusted data show.

“Monthly figures can be somewhat volatile, especially when the market is approaching a transition point,” TRREB said in the statement.

The shift in the market is coming just ahead of warmer weather in North America. It’s traditionally been a time when more buyers and sellers come to market, which could set the stage for an important few months. 

Buyers are still confronting interest rates that are at their highest levels in more than 20 years, but some shoppers are seeking to seize on a deal as speculation builds that demand could surge if the Bank of Canada cuts rates later this year. 

“The market assumption is that the Bank of Canada has finished hiking rates,” Jennifer Pearce, president of the real estate board, said in the report. “Consumers are now anticipating rate cuts in the near future.”

The increase in prices in February was relatively small as high borrowing costs still pressured shoppers. Whether home prices rally further or fall will depend if more buyers or sellers show up during the upcoming spring market. It’s often a time of year when warmer weather makes house hunting easier and families with children have a motivation to finalize a purchase before the next school year.

Sales surged in December and January as fixed-rate mortgages got cheaper. But that slowed in February, with transactions falling 12% to just under 5,700 deals. The decrease in buyer activity last month may have been related to a rise in fixed mortgage rates as markets began to bet that the Bank of Canada may cut rates later than previously thought.

And in February, the number of homes being put on the market in Toronto stayed relatively flat from the previous month at 12,165 units, outpacing the number of transactions, the Toronto real estate board data showed.

“As we move through 2024, an increasing number of buyers will re-enter the market with adjusted housing preferences to account for higher borrowing costs,” said Jason Mercer, the chief market analyst at the real estate board. “In the second half of the year, lower interest rates will further boost demand for ownership housing.”

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