This Week’s Mortgage Market Update Contains:
- Is it time to lock in your mortgage?
- Confidence in housing market a ‘good sign’: economist
- U.S. house construction rises in May
This Week’s Quotation:
“The only limit to our realization of tomorrow will be our doubts of today.” – Franklin D. Roosevelt (1882 – 1945)
This Week’s Highlights:
- Housing starts perk up
- It was the worst of times
- Is the end in sight?
WEEKLY ARTICLES OF INTEREST
Is it time to lock in your mortgage?
One mortgage broker seems to think so. Here’s why
Rob Carrick
Globe and Mail Update
Tuesday, Jun.
16, 2009 10:06AM EDT
Jas Grewal’s reaction to the recent runup in interest rates was to abandon a sweetheart of a variable-rate mortgage in favour of a safer, but more expensive, fixed-rate mortgage. Mr. Grewal, you should know, is a mortgage broker. A mortgage broker who sees the potential for much higher rates in the future. “read more….”
Confidence in housing market a ‘good sign’: economist
Financial Post
Tuesday, June 09, 2009
OTTAWA — Despite a stream of negative economic news, most Canadians who’ve recently bought a home have confidence in their decision, according to a survey by the Canada Mortgage and Housing Corporation. A national consumer survey released Tuesday said 90% of recent home purchasers believed that a house is a good long-term investment. Almost 70% of respondents also said they felt that this is a good time to buy a home.“read more….”
U.S. house construction rises in May
Martin Crutsinger
The Associated Press
Tuesday, Jun. 16, 2009 08:51AM
Construction of new homes in the United States jumped in May by the largest amount in three months, providing an encouraging sign that the nation’s deep housing recession was beginning to bottom out. The Commerce Department said Tuesday that construction of new homes and apartments jumped 17.2 per cent last month to a seasonally adjusted annual rate of 532,000 units. That was better than the 500,000-unit pace that economists had expected and came after construction had fallen in April to a record low of 454,000 units. “read more….”
“THIS WEEK’S HIGHLIGHTS”
Housing starts perk up
Housing starts showed welcome signs of improvement in May, rising to 128,400 annualized from April’s 117,600. The increase was broadly based across building types. Both urban singles starts and urban multiples starts rose 11.1% to 60.900 annualized and 46,900, respectively. Rural starts remained unchanged at 20,600 annualized units. The improvement was reasonably broad-based, with all regions posting gains except British Colombia. Ontario enjoyed the largest percentage gain, up 22%, with gains in the Prairies posting a 16.8% increase. Quebec and Atlantic Canada enjoyed more muted gains of 3.3% and 7.3%, respectively. British Columbia suffered a 5% decline in urban starts during May. The pick-up in starts is broadly in line with the forecast of an improvement during the latter half of the year compared to the weakness in the first half. It is expected that Canadian housing starts will average 141,000 in 2009 overall. As growth in the economy picks up in 2010, starts should improve modestly to 173,000, although this represents activity well below levels seen earlier this decade.
It was the worst of times
To be sure, the data reported for the first quarter of 2009 was dismal. Canada’s recorded its largest output loss since 1991, the U.S. economy registered its third consecutive quarterly decline with activity in the European and U.K. economies also shrinking substantially. To top it off, Japan’s economy shrank at a 15.2% annualized rate. In spite of the rash of bad news, investors gravitated toward the better news being reported. U.S. housing statistics showed stability in the pace of sales, the pace of job cuts moderated and consumer confidence picked up. In Canada, confidence rose as did the pace of home sales making the first quarter’s slump feel like old news. U.K. house prices have increased in two of the past three months, auto incentives appear to have put a bottom on sales and confidence has improved. Eurozone data proved a mixed bag with the unemployment rate hitting a 10-year high, but business confidence improving and order books growing. Investors took these reports as a signal that it is the beginning of the end for the Great Recession of 2009.
Is the end in sight?
The consensus is that the global recession began to lose momentum in the second quarter but still expect another round of negative growth rates to be reported. The global manufacturing ISM index recorded its fourth consecutive monthly increase in May and the services index averaged 45.3 in April/May, well above the first quarter’s 40.4. The levels remain unimpressive but signal a turnaround in sentiment, suggesting that the pace of contraction will be slower in the second quarter and that, if this trend persists, the global economy will likely be expanding in the second half of this year. |
