Point2homes has an interesting set of charts on Home Affordability In Canada vs the US that shows that homes are unaffordable in the U.S., but the situation is far worse in Canada. Indeed, it will weigh on Canada for at least another decade.
This version of the original article, by Mish Shedlock, has been edited* here by munKNEE.com for length (…) and clarity ([ ]) to provide a fast & easy read. For the latest – and most informative – financial articles sign up (in the top right corner) for your FREE bi-weekly Market Intelligence Report newsletter (see sample here)
Real Housing Prices
Eight years into the new millennium, the U.S. marched head first into one of the worst economic crises in its history following the bursting of the housing bubble. Canada’s real estate bubble hasn’t yet popped and the country has not yet seen a major decline in home prices, but the Canadian economy experienced its own share of turbulence following the oil price crash from 2014 and the burst of China’s speculative bubble. Now, 10 years after the housing crisis that destabilized the U.S., some analysts claim that Canada faces a similar scenario if it stays the course…
Canada vs U.S. Rent
…[Renting as an] alternative to homeownership has been on the rise in both Canada and the U.S. in the past decade and so has the average rent in both countries. In Canada, the average amount went up 25% in ten years, and the U.S. had a similar trajectory, posting a 23% increase since 2008... #munKNEE.com is being given away – check it out!
Case Shiller 20 City Composite
Since 2008, the price of the same house in the 20 major city study area rose only 16%. Since March of 2012, however, the price for the same home is up a whopping 55%. Along with rising interest rates, that is having a severe impact on the U.S. housing market.
Inflation Adjusted Case Shiller
In real terms, U.S. houses are more affordable now than in 2008 but they are [still] not affordable. In Canada, the bubble never corrected at all…
The Canadian bubble dwarfs the U.S. and it will weigh on Canada for at least another decade.
(*The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.)
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