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Homes for sale in Toronto's Beach area June 13, 2012.

Moe Doiron/The Globe and Mail

Sales of existing houses in the Greater Toronto Area were 3.4-per-cent lower in May than they were a year earlier, while prices continued to rise.

The number of homes that changed hands over the Multiple Listing Service came in at 10,182 last month, compared to 10,544 in May of 2012, the Toronto Real Estate Board said Wednesday.

While home sales are still depressed compared to last year, Toronto Real Estate Board president Ann Hannah said that the sales picture in the Greater Toronto Area has improved markedly over the past two months.

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"While the number of transactions in April and May remained below last year's levels, the rate of decline has been much smaller," she said in a press release.

Economists have been expecting the steep year-over-year declines to moderate because home sales in Toronto, and most of the country, were very strong in late 2011 and early 2012 and then became progressively weaker – so home sales late last year and early this year were being compared to very strong year-ago numbers to arrive at the year-over-year decreases. In contrast, sales figures for this summer and fall will be compared to lower levels.

But Ms. Hannah said that "a growing number of households who put their decision to purchase on hold as a result of stricter lending guidelines are starting to become active again in the ownership market."

There were 9,811 sales in the Greater Toronto Area over the MLS in April, down 2 per cent from April 2012.

Sales of detached homes held up last month, rising 3 per cent in the downtown region covered by the 416 area code, and by 0.1 per cent in the suburban areas covered by the 905 area code. Sales of condos and townhouses were down.

The average selling price of all types of homes in both area codes in May was $542,174, which was 5.4 per cent higher than a year earlier. The average selling price of condos that sold over the MLS rose 1.6 per cent, to $350,598. The average selling price of detached homes rose 5 per cent to $676,797.

The Toronto Real Estate Board, which represents the city's roughly 36,000 realtors, is predicting that the average selling price will rise 3.5 per cent for all of 2013, compared to last year.

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The MLS Home Price Index, which seeks to take into account any change in the types of homes that are selling, rose 2.8 per cent.

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