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Who Will Build the New Homes We Need?
The government aims to build 3.87 million new homes by 2031 through its housing strategy, which focuses on increasing construction of both owner-occupied and rental housing construction. However, a major constraint to achieving this ambitious target is finding enough skilled workers. RBC estimates that Canada could need more than 500,000 additional construction workers to meet…
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Hope Remains for US Rate Cuts Later in the Year
On May 1, the US Federal Reserve held its two-day FOMC (Federal Open Market Committee) meeting where it kept policy rates unchanged. The fed funds target range remained at 5.25% to 5.50%, where it has been since last July. Fed Chairman Jerome Powell emphasized in policy statements that rates will persist at current levels “as…
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Further Thoughts on the Budget and Housing
Last week, we examined the new housing road map laid out in the 2024 federal budget. This week, we’re offering a few additional thoughts on two related issues: the importance of private sector investment in rental housing and the impact of investors in the real estate market. Encouraging Private Sector Investment in Rental Housing Although…
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Expect the Bank of Canada Not to Wait for the Fed to Start Cutting Rates
With the likelihood of a summer rate cut by the US Federal Reserve fading, there are growing concerns the Bank of Canada will be unable to diverge significantly from the Fed in its timing of any rate cuts. Despite this, the actual timing and extent of interest rate cuts by the Bank of Canada will…
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Budget 2024 – A New Housing Road Map
Budget 2024 focused heavily on housing. Budgets are as much about communication as they are about action. This one is a broad-based program that attempts to cover a range of housing initiatives. Notably, the budget drew attention to the supply challenges stemming from rapid immigration growth. While highlighting all federal measures that are planned, it…
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The Fed’s Housing Problem
Hotter-than-expected inflation data is fueling concerns over the timing and frequency of potential interest rate cuts by the Fed this year. The Fed is highly data dependent and persistent inflation has increased the chances of a no-landing scenario where inflation remains high or even accelerates despite efforts to tame it. Austan Goolsbee, the head of…
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Improving Efficiency in the NHA MBS Market – Transparent Pricing is Paramount
The March 27th Housing Affordability Watch outlined several initiatives CMHC could undertake to improve efficiency in the housing finance system and address affordability issues in Canada’s housing market. This is the third instalment in a series that explores these options in detail. The Canada Mortgage Bonds Program (CMB) was established in large part because of…
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