US Consumer Sentiment Jumps to Highest Level Since July 2021
US consumer sentiment rose markedly toward the end of March, supported by strong stock-market gains and expectations that inflation will continue to ease.
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US consumer sentiment rose markedly toward the end of March, supported by strong stock-market gains and expectations that inflation will continue to ease.
Pending sales of previously-owned homes in the US recovered last month after declining at the start of the year, adding to evidence that the housing market is gradually improving.
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Dec 20, 2021
By Noah Zivitz
Housing affordability in Canada deteriorated to the worst level in 31 years in the third quarter of 2021, according to a new report from RBC Economics.
According to RBC Economist Robert Hogue, aggregate home ownership costs rose to 47.5 per cent of median household income in the latest quarter. That was a sequential increase of two percentage points and marked a nearly six point increase compared to a year earlier.
RBC includes factors such as mortgage payments, property taxes and utilities to measure ownership costs.
"The need for more supply has never been greater. This became clearly evident in the past year with bidding wars springing up in places that have rarely or never seen them before, and intensifying in places more accustomed to them. And until demand and supply return closer to balance, prices will continue to rise," Hogue wrote in the report.
Vancouver laid claim to the least affordable market, as ownership costs accounted for 64.3 per cent of median household income in the third quarter, up 0.9 percentage points from the previous quarter.
In Toronto, meanwhile, the proportion rose to 61.9 per cent, up 2.7 points from the second quarter -- which represented the most significant deterioration in affordability of all markets tracked by RBC.
In the report, Hogue said the outlook for buyers "is grim," particularly as the Bank of Canada sets the stage for liftoff next year. The central bank's most recent formal messaging has been that conditions are likely going to be conducive for raising rates in the "middle quarters" of next year. Hogue estimates RBC's national gauge of affordability could rise another two to 3.5 points as a result of higher rates.
"A potentially significant deterioration in affordability could squeeze many buyers out of the market—or at least out of a market or housing category. That would be the market’s self-correcting mechanism at work. So long as supply is slow in coming, much of rebalancing adjustments will fall on the demand side of the equation."
One city managed to buck the trend in the third quarter: affordability was unchanged in St. John's, where home ownership costs account for 22 per cent of median household income.