Fed Exuberance Index for Canada Turned

🏡 The Fed Exuberance Index for Canada comes down.

This real estate index measures how far the price growth is from fundamentals.

A market is exuberant with 5+ quarters of excess price growth.

The Canadian market has been in that state for almost 7 years.

The pandemic phenomenon reversed the falling index.

In 2021, the housing price shot up 27% Y/Y.

High price eventually pushes out buyers and dampens demand.

Bank of Canada data shows Dec '21 new mortgages down 19% Y/Y.

The smallest funds borrowed since Mar '20.

Further reading:

Better Dwelling, Canadian Real Estate Bubble Sentiment Is Collapsing Fast: US Federal Reserve Data