Canadian home prices rose to another record in January 2022. Sales also surged as home buyers are looking to take advantage of mortgage rates ahead of an anticipated tightening cycle. Interest rate hikes may put pressure on the housing market, but low supply and high demand should provide ample support. Indeed, Canada expects to welcome over 430,000 newcomers in 2022. Most of those new immigrants will settle in major metropolitan areas, where prices and demand are highest.
In this environment, investors may want to target top housing stocks. Home Capital Group (TSX:HCG) is a top alternative lender in Canada. Its shares have dropped 5.7% so far this year as of mid-afternoon trading on February 18. The stock is still up 18% year over year.
The company unveiled its fourth quarter and full year 2021 results on February 17. Adjusted net income rose 37% year-over-year to $249 million. Meanwhile, mortgage originations rose to $8.86 billion in 2021 compared to $6.95 billion in the previous year. Better yet, it reinstated its quarterly dividend of $0.15 per share.
Equitable Group (TSX:EQB) is also a top housing stock to consider this month. Its shares have jumped 7.5% in 2022. The stock is up 30% in the year-over-year period. Total loan originations rose 39% to $14.0 billion in 2021. Its shares possess a very favourable price-to-earnings ratio of 9.2. Moreover, it offers a quarterly dividend of $0.28 per share. That represents a modest 1.4% yield.
