Welcome back to The Week in Review.

I hope you had a good one. I am in Toronto this week, visiting my family. The city is booming. From the the balcony of my parents’ condo, just north of downtown, I can see a dozen cranes dotting the horizon. I come back here pretty often, but the skyline looks more impressive every time I visit.

This construction boom consists primarily of housing to accommodate the explosion of new Canadians over the past few years. They’re arriving from all over the world. Many of them are students. The surge has been remarkable, even for a country that has historically welcomed a high number of immigrants compared to the country’s population.

I think this is a great thing. Of course, I would be predisposed to feeling this way. My family emigrated to Toronto, from East Africa, in the 1960s. And—like all Canadians—I was instilled from a young age with a positive perception of immigration¹.

But, just as the skyline is changing, so are Canadian attitudes. Recent polling (here, ◎) shows that we are becoming less positively predisposed towards immigrants. The reason is not some new strain of xenophobia. It’s the surging cost of housing. In the public opinion, this is at least partly due to demand from newcomers.

This is a big and complex topic and warrants more work. I intend to do that work over the coming months. But for now: even if rising prices signal a vibrant city, Toronto—like almost all cities in the Anglosphere—needs to build at a rapid pace to house immigrants. At the same time, I struggle to imagine this will be enough to normalize the perception of housing affordability here.

Turning to the week ahead, the main events will be CPI inflation at 8:30am on Wednesday, and the Fed statement and press release concluding the central bank’s 2-day meetings, also on Wednesday, at 2pm. Zillow releases home prices on Wednesday, giving us an early read on what Case-Shiller will report a few weeks from now.

Subscribers can download the housing economic data calendar here ◉.

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News: Nonfarm payrolls were surprisingly strong, Treasury yields rose
Views: Incomes outweigh mortgage rates; home demand should stay high

On the first Friday each month, the Bureau of Labor Statistics releases the employment situation report. The report contains two parts: the results of a survey of firms (which gives us the nonfarm payrolls figure), and the results of a survey of households (which gives us the unemployment rate). Typically these two surveys indicate the same thing—either strengthening or softening labor markets. But this month’s report was less clear-cut.

On the one hand, nonfarm payrolls rose 272k in May, 92k above consensus. On the other hand, the household survey was soft, with the unemployment rate increasing slightly, to 4%. On balance though, the data paints a picture of a strong US economy. Consider that:

• A 474k decline in household employment for 20-24 year olds more than fully accounted for the overall decline in household employment.

• Average hourly earnings increased by 0.4% month over month in May, above expectations. Both the April and March readings were revised up.

• The ultimate arbiter of mixed data is markets. UST yields rose by 13bp, suggesting investors perceive a combination of a smaller chance of Fed easing and/or higher inflation after the report.

Of note for the housing industry: while job growth over the past year has been concentrated in industries that are less cyclically sensitive (health care, government, leisure & hospitality), the construction industry has been an exception. As Wells Fargo reports:

“employment has risen, and hiring in the construction sector seems to have powered through the interest rate headwinds via the tailwinds from higher infrastructure spending, booming construction of technology-related manufacturing facilities and still solid single-family home construction.”

Strong labor markets come along with higher incomes, even if they also come with higher mortgage rates. Historically, incomes have dominated, and home prices have risen during economic expansions. This month’s employment report suggests an ongoing expansion. Most analysts forecast rising home prices this year.

News: Fannie Mae survey: 86% of consumers say it’s bad time to buy a home Views: Don’t look at what consumers say, look at what they do

The Fannie Mae Home Purchase Sentiment Index (HPSI, here ◎) decreased 2.5 points in May to 69.4. The index was driven lower by the component measuring consumer attitudes toward homebuying, which fell to an all-time survey low (the HPSI data starts in 2010). Still, the full index is up 3.8 points year over year.

Some highlights:

• This month, only 14% of consumers indicated that it’s a good time to buy a home, down from 20% last month

• Consumers continue to believe affordability will remain tight for the foreseeable future, due to both high rates and prices

• A growing share of respondents, now 20%, indicated that their household income is significantly higher than it was a year ago

As I wrote above, home demand and prices are determined by both income and affordability factors. Despite most consumers thinking it’s a bad time to buy, as long as incomes are healthy, the market will remain strong. And, on this, consumers seem to agree: the net share of consumers who say home prices will go up increased 2 percentage points to 25%—the highest in several years.

The distraction episode. Regular readers know I am obsessed with minimizing distractions. They dent my productivity, but maybe even more importantly, distractions shift my state of mind. If they occur frequently enough, I feel frazzled and frustrated by the end of the day. I agree with those (like Paul Graham here ◎) who argue that distractions not only postpone achieving great results, they sometimes make them impossible.

Here are three things that are helping me minimize distractions these days.

The Waking Up app/Oliver Burkeman. My friend Eric bought me a subscription to the Waking Up app. It’s nominally a meditation assistant, like HeadSpace, but has a lot of additional resources. Some are only tangentially related to meditation. One of these is a series by Oliver Burkeman, in which the journalist/deep thinker summarizes his recent (excellent) book, Four Thousand Weeks: Time Management for Mortals.

Burkeman argues that we tend to think about productivity wrong: it’s not that inefficiencies are holding us back from achieving all our goals, it’s that we hold an unrealistically high number of goals considering our finite time (the average human lifespan is a mere 4,000 weeks). He thinks we can find calm and happiness—and maybe even greater productivity—by acknowledging this disconnect. The Waking Up app, here ◉, and Oliver Burkeman’s book, here ◉.

Essentialism. This terrific book pairs well with the above. Author Greg McKeown argues that, given our finite time, we must apply selective criteria to identify what is essential. In his words, “it’s not about getting less done. It’s about getting only the right things done.” Essentialism: The Disciplined Pursuit of Less, here ◎.

MaxFocus. Tech geeks are obsessed with the Arc Browser (here, ◎). I love what Arc tries to do, but a browser has to work 100% of the time, and Arc simply does not. When I switched back to Chrome, I missed some of Arc’s bells and whistles. One of them is the ability to preview a link: clicking and holding to bring up a small window with a preview of the content behind the link (instead of opening another distracting tab). This is what MaxFocus, a Chrome extension, does. Combined with another extension, Vertical Tabs (here ◎), you can get most of the way to what makes Arc special, without the unreliability. MaxFocus, here ◎.

Music for airports. For those times when you absolutely can’t get away from distractions—crying babies, entirely hypothetical office neighbors with very loud, nasal voices—I recommend Brian Eno’s famous Music for Airports (volume 1), piped through Airpods with noise cancellation turned on. I generally can’t work with music, but this isn’t music. Eno designed these soundscapes to soothe harried travelers, and they’re effective for soothing harried office workers, too. Music for airports, here, ◎.

Have a great, distraction-free weekend!