Macroeconomic & Geopolitical

Housing Trembles But the Foundation's Still Strong

May 2022 – 3 min read

U.S. housing demand is cooling as the 30-year mortgage rate reaches a 13-year high, though housing starts and permits remain above pre-COVID levels. Economic data shows strong but normalizing growth, and recession risks remain as PMIs, housing data, and China’s economy all slow.

Watchlist

housing-trembles-but-chart1.jpgArrows indicate consensus forecast compared to the previous period. Local dates of release.

U.S.
  • We will watch the May employment report, which is expected to show a strong labor market, though the pace of job gains could ease as growth slows.
  • The ISM surveys should show how higher input and output costs are impacting activity and firms.
Europe
  • Military and economic responses to Russia’s war in Ukraine remain at the top of the watch list as energy disruptions put added pressure on prices.
  • EA inflation is expected to stay at its record high, while we are also watching EA employment data to see if the labor market remains tight.
Asia Pacific
  • Japan activity data for April will reflect the extent of the rebound after restrictions were lifted in late- March.
  • China PMIs for May should show a slight improvement but remain in contractionary territory, amid mounting costs of the lockdowns.

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Kathryn Asher

Associate Director, Economist

Agnès Belaisch

Managing Director, Chief European Strategist

Matteo Cominetta

Director, Economist

Bonnie David

Assistant

Christian Floro

Associate Director

Anna Hanley-Walsh

Analyst

Christopher Smart, PhD, CFA

Chief Global Strategist & Head of the Barings Investment Institute

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