The bear thesis just got demolished...
Canadian home sales up 63% in June, prices rise 6.5% year-over-year
WE all have heard about the bidding wars and rise in mortgage inquries for the past two months and we are now seeing the real data reflecting the same sentiment.
The TRUTH is if the COVID situation taught us anything, it is the importance of having your own home. With all the lockdowns, people are spending MORE on their homes, whether its upgrading to a bigger home or buying new furnitures. That is why you see sales in Wayfair and Restoration Hardware surging.
The bear thesis of mortgage deferrals will translate to loan losses just got demolished. We didn't see people fire selling their homes that shows borrowers are confident they will be able to pay their mortgages. And if they cant pay, they can always sell in this market.
Home prices are actually UP 6.5% from last year. There is clearly a demand/supply mismatch...SUPPLY is very limited and demand is sky high