UPDATE 1-Canada existing home sales up 2.7 pct in September
* Sales up in September after three flat months
* National market tightens, but still balanced
TORONTO, Oct 17 (Reuters) - Sales of existing homes in Canada picked up in September after three months of stable activity, led by strong sales in Toronto, the Canadian Real Estate Association (CREA) said on Monday.
The industry group said sales rose 2.7 percent from August and were up 11 percent from September 2010, a period of relatively weak activity.
The national average price in September rose 6.5 percent from a year earlier to just under C$352,600, which was below the record level heights reached earlier this year, CREA said. The year-over-year increase was the smallest since January.
"The Canadian housing market remains a bright spot against a backdrop of mixed headline news about the global economy," Gary Morse, CREA president, said in a statement.
"Low mortgage rates continue to draw buyers to the housing market, while recently tightened mortgage regulations are working as intended."
The number of newly listed homes nationally was little changed from each of the previous two months. New listings were up from August in Toronto, Montreal, Ottawa, Oakville, Ontario, and Vancouver, offset by fewer new listings in markets such as Edmonton and British Columbia's Fraser Valley.
The monthly rise in sales resulted in a tighter national housing market but one that is still well balanced, CREA said. The national sales-to-new listings ratio, a measure of market balance, stood at 52.8 percent in September, up from 51.6 percent in August.
Based on a sales-to-new listings ratio of between 40 to 60 percent, nearly two-thirds of all local markets in Canada were in balanced market territory in September, with an even split of buyer's and seller's markets among the remainder, CREA said.
The number of months of inventory stood at 6.1 months at the end of September on a national basis, little changed from the 6.2 months at the end of August.