The Daily Chase: Housing remains in the spotlight

Here are five things you need to know this morning.

CREA numbers: The housing market has always been something of a national obsession in Canada, but interest in the topic seems to have hit a fever pitch since the pandemic, as prices and supply have risen and fallen along with interest rates. We got a new data point on our national pastime this morning when the Canadian Real Estate Association (CREA) released its latest national sales numbers for March. March is typically a decent month for home sales, as the market shakes off its winter doldrums, but that doesn’t seem to have happened this year, as sales rose only 0.5 per cent from February’s level, and are still 10 per cent below the average level we’ve seen for the month over the past decade. Expectations of rate cuts had prompted a mini rally to start the year, but as those expectations are being pushed down the line, the spring market isn’t exploding out of the gates. Depending on what the Bank of Canada does, that could change, however. “Will the story be high interest rates keeping a lot of people on the sidelines this year, or the much expected and anticipated first rate cuts enticing a lot of people back into the market,” CREA’s chief economist Shaun Cathcart said. “Probably a bit of both.”

Feds roll out housing plans in budget leaks: Regardless of today’s numbers, we know the topic of housing is going to feature prominently in next week’s federal budget. It’s hard to call them “leaks” when they’re coming out via ministerial press release on an almost daily basis, but earlier this month the government already announced billions of dollars for development of new homes and apartments, and just yesterday, Finance Minister Chrystia Freeland announced that amortization periods on insured buyers of new homes by first time buyers will be extended to 30 years, from 25 presently. On average, the impact of that move will be to lower the monthly carrying cost of $100,000 worth of mortgage debt by about $48 per month, according to Victor Tran of Rates.ca, but while the government is pitching the move as one that will ease affordability, ultimately it leads to higher lending costs over the long run by extending the amount of time a borrower is scheduled to be paying off the loan. Expect more of the same on Friday as Freeland and Prime Minister Justin Trudeau are slated to announce another housing related development this morning.

Profit drops at food court giant MTY: It’s not exactly a household name, but quarterly earnings from MTY Food Group are always circled on my economic calendar. Not only because of my secret love of food court fare, but because they make for a decent proxy of the state of one slice of the economy. If people are spending more dining out, that not only suggests they have a willingness to spend, but also a willingness to go out to the office or somewhere else downtown in the first place, the theory goes. MTY, which owns food court staple brands like Manchu Wok, Mr. Sub, Mr. Souvlaki, Tacotime, Wetzel’s Pretzels and dozens more, published quarterly results this morning that showed weakness across the board. Revenue came in at $279 million system-wide, a three per cent decline, while profit slipped from $18.4 million to $17.3 million. Sales across the entire system of more than 7,000 restaurants around the world slipped two per cent to $1.33 billion from $1.36 previously, in a sign that consumers might be tapping out.