Weekly Market Pulse

I start every week by running through the same set of market indicators that inform how I underwrite, finance, and pace capital across my portfolio. Here’s what caught my attention. Government of Canada yields have stabilized in the very near term but remain meaningfully higher than they were three to twelve months ago, housing starts provided no new information this week but continue to reflect a slowing supply pipeline on a trend basis, and equity markets remain resilient despite persistently tight credit conditions. It is important never to look at real estate in isolation, and this week reinforced that point clearly.

Featured Metric Deep-Dive

The metric I focused on this week is housing starts. CMHC total housing starts are reported at 232,765 units on a seasonally adjusted annualized basis. This is not a weekly data point, housing starts are released monthly, which means there has been no change week over week. That matters because it prevents over-interpreting short-term noise. Where housing starts do become useful is in the trend context. The most recent release shows starts down 16.6 percent month over month, down 20.9 percent over three months, down 16.5 percent over six months, and down 3.3 percent year over year.

Let me explain why this matters. Housing starts are a forward-looking supply indicator, particularly relevant for multifamily underwriting. A sustained slowdown in starts today typically translates into fewer completed units twelve to twenty-four months out. From a cash flow perspective, that affects rent growth assumptions far more than near-term rate movements. On a stabilized 60-unit apartment building generating $1.4 million in annual gross rent, a conservative 100 basis point reduction in expected competitive supply pressure can reasonably support an incremental 1 percent improvement in rent growth by year three. That equates to roughly $14,000 of additional annual revenue, which capitalized at a 6.25 percent exit rate translates into approximately $225,000 of incremental valuation. Housing starts do not move prices immediately, but they quietly reshape the supply side of the equation.

Yield Curve Analysis

The yield curve is positively sloped but shallow, reflecting term premium persistence rather than recession signaling. The one-year Government of Canada yield sits near 2.46 percent, while the ten-year yield is approximately 3.45 percent. Short-term rates remain anchored by policy expectations, while longer-term yields reflect higher term premiums than a year ago. Importantly, yields are up materially over the three to twelve month window across the curve, even though week-over-week movements have been muted. The signal I take from this is not imminent economic stress, but rather persistence. Capital is still being priced cautiously, and duration risk remains expensive.

Current Financing Environment

Financing conditions continue to reflect that persistence. Five-year CMHC-uninsured fixed mortgage rates are holding near 4.49 percent, unchanged on the week, while conventional five-year residential fixed rates remain around 3.99 percent. On the commercial side, the five-year Canada Mortgage Bond yield is approximately 3.13 percent and the ten-year sits near 3.66 percent. Mortgage bond spreads over Government of Canada equivalents remain contained but wider than last year, with the ten-year spread near 21 basis points. Compared to twelve months ago, borrowers are facing higher all-in costs, but relative stability week to week has reduced underwriting uncertainty. From my perspective, predictability is currently more valuable than marginal rate relief.

Market Signals

The Bank of Canada policy rate remains at 2.25 percent, unchanged this week and down significantly from its level a year ago. CORRA is similarly stable. There is no evidence in this dataset of fiscal tightening, but financial conditions remain tight due to elevated medium-term yields and mortgage rates that are still well above pre-2022 norms. Housing starts provide a structural signal on future supply, while construction price indices remain largely flat, suggesting cost inflation is no longer accelerating. I’m also watching mortgage bond spreads closely, as they often move ahead of changes in lender risk appetite.

My Strategic Positioning

• I am underwriting new acquisitions assuming stable rents in year one, with modest growth thereafter driven by supply normalization rather than demand acceleration.

• I am favoring fixed-rate financing in the five- to ten-year range where rate volatility has compressed and cash flow visibility is highest.

• I am pacing capital deployment deliberately, prioritizing assets with durable in-place income over those reliant on near-term appreciation.

Macro Context

Equity markets continue to show strength. The TSX is up approximately 0.6 percent on the day and nearly 8 percent over the past three months, while the S&P 500 is up roughly 0.1 percent on the day and close to 6 percent over the same period. Risk assets remain well bid despite higher rates, which creates a timing mismatch for real estate. Capital markets are optimistic, while private markets are adjusting more slowly. For rental fundamentals, this backdrop remains supportive. Employment stability and population growth continue to underpin demand, even as affordability constraints push more households toward renting rather than owning.

Bottom Line

This is a market defined by patience rather than momentum. Rates are higher than they were last year and appear sticky. Supply growth is slowing, but its impact will be gradual. Equity markets are optimistic, but real estate pricing continues to adjust methodically. For my own portfolio, the environment favors disciplined underwriting, conservative leverage, and a focus on cash flow durability. The opportunity is not in predicting rapid rate cuts or valuation rebounds, but in structuring deals that work well enough if conditions simply remain as they are.

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