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Low mortgage rates and softer home prices helped sharply boost April's house sales, which rose for the third month in a row.

Sales of homes in Canada, seasonally adjusted, jumped 11.2 per cent last month from March, the largest month-to-month increase in more than five years, according to the latest numbers from the Canadian Real Estate Association (CREA).

The gain compounds advances of 10.3 per cent in February and 7.7 per cent in March.

Rock-bottom mortgage rates and prices that are 3.2 per cent lower than a year ago, on average, are the main reasons for the rebound, said Robert Kavcic, an economist at BMO Nesbitt Burns.

"The overall costs of carrying a home are way down," he said.

Those lower costs, along with a sunnier attitude about the economy, have helped to get more people into the market, said Deanna Noyce, a real estate agent in Victoria.

"People are just feeling a little more confident and positive about the economy," she said. "Low mortgage rates definitely have helped people who would not have been looking a year or two ago."

That, combined with slightly lower prices, has created a "whole package that is definitely more appealing," she said, especially for first-time buyers.

While prices are still trending lower, the decline appears to have moderated with the increased sales activity.

In some markets - Atlantic Canada, Quebec, Manitoba and Saskatchewan - home prices have actually gained ground year over year. In Newfoundland, they are up almost 17 per cent in April from a year ago.

But the provinces that have been hit hard by the recession - British Columbia, Alberta and Ontario - still saw some softening in prices. Average prices have declined almost 7 per cent year over year in Alberta.

"The worst of the correction in the Canadian housing market may be behind us," said Millan Mulraine, an economics strategist at TD Securities. "The housing sector may be on the mend."

While the numbers suggest that Canada will not be hit with a real estate meltdown on the scale of the disaster in the United States, the business is still weak relative to last spring.

Compared with a year ago, home sales were down 11.8 per cent, CREA said. But this is a far milder decline than the record year-over-year drop of 42.2 per cent in November.

Economist Derek Holt at Scotia Capital Inc. doubts the month-over-month momentum can be sustained, mainly because the current surge is partly a result of unfulfilled demand from last winter.

Activity is strong now partly because no one was buying late last year when housing markets in Canada stagnated, he said.

That's certainly the case in Calgary, real estate agent Jim Sparrow said.

Earlier this year "we had people standing on the curb," he said. Now, "everyone is busy. ... We're not having a lot of multiple offers, but there is a lot of product moving."

Still, Mr. Sparrow is cautious. A recent spate of layoffs in Alberta could end up hurting the real estate market in the coming months, he said, especially if the current upward move in the price of oil is not sustained.

The key to the substantial increase in sales in the past few months is a growing realization by sellers that pricing has to be realistic, said Dale Ripplinger, a real estate broker based in Regina who is also the president of CREA.

"Price adjustments in some markets have helped affordability. Second, lenders do have money for people and properties that qualify, although some are being more stringent."