TD / Canada Trust Weekly Economic Highlights – Jan 21


United States

  • Very strong housing starts provided the silver lining to a week with plenty of positive data releases.
  • We expect residential construction to contribute roughly 0.5 percentage points to overall real GDP growth and close to 500K net new jobs this year.
  • Leaving aside the policy uncertainty that still hangs over the U.S. economy on the fiscal front, the firming of the housing market, a very accommodative monetary policy stance and subdued inflationary pressures are good precursors for an acceleration in U.S. economic activity in the coming quarters.


  • The Bank of Canada’s Business Outlook Survey revealed that businesses are mildly optimistic about the future. Manufacturing sales also came in better than expected earlier this morning.
  • The third Canadian data release for the week was the one that had everyone talking. Existing homes sales posted a 17.4% year-over-year drop in December – the largest drop registered since late-2010. Home prices eked out a gain, but momentum has undoubtedly decelerated over the course of the year.
  • Tighter government-backed insured mortgage rules and stricter lending practices have contributed to the recent housing weakness. Looking ahead, we do not expect the Canadian housing market to undergo a U.S.-style crash. Instead, prices and sales should stabilize in the months ahead, but a gradual, medium-term adjustment remains in the cards.


For further information, please contact:


John Maveety Manager, Residential Mortgages – Greater Ottawa Area

TD Canada Trust

T: (613) 371-1984 F: (888) 899-1984 P: (866) 767-5446

[email protected]