I'm thinking that, if you are comparing US and Canada, you might want to consider "after-tax" housing costs, since I understand mortgage interest is tax deductible in the US but not in Canada
I think an Issue here is exactly what you pointed out: the difference between US fixed mortgages and other places.
When US raises Interest rates, they are much less sensitive to that - The raise impacts mostly new buyers, and depresses the construction market.
When CAN raises interest rates, it sucks money directly from everyone - much higher action!
But when you invest money, you get the interest rate. So higher rates for the US - which they need, to have similar impact, would mean large appreciation in price of USD. This will increase inflation, since every commodity is priced in USD.
So CAN (and lots of other countries) kind of have to follow the US in rates, which means the over constrict their economies.
BS:
read Kevin Erdmann, there was no housing bubble in 2008, just a sub-prime crisis.
I'm thinking that, if you are comparing US and Canada, you might want to consider "after-tax" housing costs, since I understand mortgage interest is tax deductible in the US but not in Canada
I think an Issue here is exactly what you pointed out: the difference between US fixed mortgages and other places.
When US raises Interest rates, they are much less sensitive to that - The raise impacts mostly new buyers, and depresses the construction market.
When CAN raises interest rates, it sucks money directly from everyone - much higher action!
But when you invest money, you get the interest rate. So higher rates for the US - which they need, to have similar impact, would mean large appreciation in price of USD. This will increase inflation, since every commodity is priced in USD.
So CAN (and lots of other countries) kind of have to follow the US in rates, which means the over constrict their economies.
BS:
read Kevin Erdmann, there was no housing bubble in 2008, just a sub-prime crisis.