When we think of our neighbors to the north, we don’t usually think of their lives as very difficult. It’s actually hard not to think they might have it pretty good in Canada. But if you look at their housing market from a consumer’s perspective, you wouldn’t want to live anywhere but right here in the good old US of A.
Avoiding the debate about who has the better housing policy or mortgage regulation, let’s talk about the homeowner’s experience. In Canada there is no 30-year mortgage. All mortgages are basically 5-year ARMs with 25-year amortization periods. Every five years you ante up or refinance. There are even stiff prepayment penalties for anyone thinking about taking advantage of a low-rate environment in the interim.
With the potential of a housing crisis looming in Canada, the head of the central bank basically said “let them buy smaller houses.” Ouch! Obviously a Marie Antoinette fan. It is a nice reminder of how even in today’s housing market we may have it pretty good.
And if you are looking for more world news to share with your clients that are down on where we are, you can let millennial clients know the grass isn’t any greener on the other side of the great pond. As only the British Ministry of Housing could put it, “Over the last decade, the drop in the proportion of 25-34 and 35-44 year olds in owner occupation has been particularly pronounced.” Say that with an English accent and it actually sounds like a good thing.
So while the summer of 2018 is neither “the best of times” nor “the worst of times” in the American housing market, consumers still have it pretty good. That is a Charles Dickens “Tale of Two Cities” reference to bring us back to Marie Antoinette who most likely never said anything like “let them eat cake.”
Call your Embrace loan officer soon — you can meet up to get an iced coffee, some cake, and contemplate the rest of the summer.