Multiple Listing Service® (MLS®) residential sales in British Columbia are forecast to edge up 1.9 per cent to 68,900 units this year. While home sales are expected to trend higher by year-end, relatively weak sales activity during the first quarter will limit the year-end tally to only a modest gain. Stricter credit regulation introduced last summer on high-ratio mortgages eroded the purchasing power of many first-time and early move-up homebuyers. Unit sales per capita adjusted for inflation hovered at a cyclical low for the last three quarters, suggesting some pent-up demand may be latent in the market. 2013 is shaping up to be a transition year in both the economy and housing market. Slower economic growth over the last two quarters is expected to give way to stronger economic performance beginning in the second half of the year. Persistently low mortgage interest rates are expected to continue to underpin housing affordability and demand. MLS residential sales are forecast to increase a further 6.5 per cent to 73,400 units in 2014. Home sales are expected to remain below the 15-year average of 79,000 units. Despite a relatively low level of consumer demand, market conditions in many BC markets have improved. Home prices in Vancouver, for example, stabilized during the first quarter as inventory kept pace with demand. Home prices are expected to remain relatively stable over the next two years. The average annual MLS residential price in the province is forecast to remain unchanged this year.