News in end use

As the outlook for Canada’s inflation rate continues to worsen, Canadian investors are betting that the Bank of Canada (BoC) will begin hiking its key interest rate in half-percentage-point increments, with the first of rarely used upsize moves possibly coming as soon as this month.

According to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Application Survey (WMAS), for the week ending April 1, 2022, the Market Composite Index (a measure of mortgage loan application volume) declined -6.3 % on a seasonally adjusted basis from one week earlier.

The current labor shortage across the U.S. is nothing new to the construction industry. During the homebuilding boom in the early 2000s, there was a lack of construction workers. The Great Recession and the resulting housing market collapse, which in turn created the foreclosure crisis, caused that shortage to end.

The U.S. Department of Housing and Urban Development (HUD) is asking for mortgage industry input on a proposed rule change that it offered late last week, which would change repayment provisions for FHA borrowers. The change would allow lenders to recast a borrower’s total unpaid loan for an additional 120 months.

On Monday (4-4-22), Statistics Canada (StatsCan) reported that the total value of building permits climbed 21.0% in February, with British Columbia leading the way with a 130.2% increase. On a constant dollar basis (2012=100), the total value of building permits increased 22.1% in February.

According to a survey between March 1-4, 2022, housing prices are still soaring. The growth seen by the typical single-family home over the past two years has been scorching and surprisingly consistent. At some point, something must give way, and it seems that affordability has been the first to fall.

In a new report released on Thursday (3-31-22), Redfin, the Seattle-based, technology-powered real estate company, reported that mortgage rates continue to rise at the fastest pace in history. As a result, the typical monthly mortgage payment for a homebuyer has increased more than $500 since the start of 2022.

On Friday (4-1-22), the U.S. Census Bureau reported that total construction spending during February 2022 was estimated at a seasonally adjusted annual rate (SAAR) of $1,704.4 billion, 0.5% above the revised January estimate of $1,695.5 billion. The February figure is 11.2% above the February 2021 estimate of $1,533.3 billion.

The U.S. Bureau of Labor Statistics (BLS) reported today (4-1-22) that total nonfarm payroll employment increased by 431,000 in March, following revised increases of 750,000 in February and 504,000 in January. In 2022 Q1, job growth averaged 562,000, the same average monthly gain as seen in 2021 Q1.

The U.S. Bureau of Economic Analysis (BEA) reported on Thursday (3-31-22) that, according to their estimates, personal income (PI) increased $101.5 billion (0.5%) in February. Disposable personal income (DPI) increased $76.1 billion (0.4%) in February. Personal consumption expenditures (PCE) increased $34.9 billion (0.2%) in February.