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Art by Annie Gugliotta

Broken housing markets could shape US and Canadian elections

The United States and Canada share hundreds of billions in annual trade, a deep defense relationship, the world’s longest undefended land border, and an affordability crisis that threatens to upend political fortunes. At the heart of that problem is housing. As both countries grapple with inflation and rising interest rates, the cost of shelter and the risk of foreclosures are rising.

The causes of unaffordable housing include a complex mix of under-supply (itself caused by several things), urbanization, marketization and speculation, immigration, population growth, temporary foreign workers, international students, and natural barriers. But whatever the cause, the US and Canada are both millions short on needed housing stock.

For President Joe Biden and Prime Minister Justin Trudeau, unaffordable shelter presents both a policy challenge and a political liability, especially as each faces looming elections. Biden is up for reelection in late-2024, and Trudeau must face voters by the fall of 2025.

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A pedestrian passes a "Help Wanted" sign in the door of a hardware store in Cambridge, Massachusetts.

REUTERS/Brian Snyder

US jobs soar despite Fed’s high interest rates

A stunning US jobs report on Friday showed that the US economy added a whopping 517,000 jobs in January, far more than the expected 187,000 – taking unemployment down to 3.4%, the lowest it's beensince May 1969. This, coupled with the 11 million US employment openings at the end of 2022, reflects a hopping job market. Experts attribute the surprise figures to there being so much pent-up labor demand that companies continue to hire, though the tech sector has seen a recent slew of layoffs. Job creation has increased in areas like housing and finance, which would normally be more sensitive to high interest rates.

Sounds pretty great, right? Not exactly. The Federal Reserve has been desperately trying to slow the economy and tamp down inflation by raising interest rates, with eight hikes since March 2022. More jobs, however, mean more money being heaped into the economy, so markets tumbled Friday morning as investors anticipated more interest rate hikes in response. That said, the hiring surge may give economists a reason to soften their predictions about a looming recession, or at least about its severity.

A demonstrator celebrates after Colombia's constitutional court decriminalized abortion until 24 weeks of gestation.

REUTERS/Luisa Gonzalez

Hard Numbers: Colombia decriminalizes abortion, Burkina Faso gold mine explosion, US house prices soar, Italy rescues migrants at sea

3: On Monday, Colombia became the third Latin American country — after Argentina and Mexico — to decriminalize abortion in just over a year. A big shift for the majority-Catholic nation, the constitutional court ruling will allow abortion during the first 24 weeks of pregnancy.

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What COVID-19 has meant for home sales & prices
Betty Liu Explains: What COVID-19 Has Meant for Home Sales & Prices | Money In :60 | GZERO Media

What COVID-19 has meant for home sales & prices

Betty Liu, Executive Vice Chairman for NYSE Group, explains:

How has the housing market reacted to the COVID-19 pandemic?

So, as you can well imagine, when stay-at-home orders are put in place, the housing market just dried up. Sales fell dramatically. Existing home sales in the month of April dropped nearly 18%. However, home prices actually continue to still rise. The median price for an existing home in the United States was $286,000. That was a rise of 7.4% from April of 2019.

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