A Comparison of U.S. and Canadian Residential Mortgage Markets
AbstractAs financial markets move toward increased globalization, it becomes worth considering whether inherent differences in financial markets across different countries will diminish. For two countries more similar than different in terms of geography, location, government and culture, Canada and the U.S. remain strikingly different in terms of housing finance. Public policy objectives toward housing followed quite different paths over the past seventy years and fundamental differences in banking practices have led to considerably different outcomes in terms of mortgage finance instruments in the two countries. In light of that, it is particularly surprising that homeownership rates do not diverge by much, reaching 67% in the United States and 64% in Canada by year-end 2000. We examine some of the differences in policy and in competitive practices between Canada and the U.S. in an attempt to illuminate why differences in rates and terms across the two countries still exist. While a part of the difference remains due to legal constraints concerning the finance of the domestic housing sector, we do not attempt an analysis of the legal structure and focus, rather, on the economics and public policy choices that have led to the observed differences.
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Bibliographic InfoPaper provided by Department of Economics, University of Victoria in its series Econometrics Working Papers with number 0201.
Length: 49 pages
Date of creation: 27 Mar 2002
Date of revision:
Note: ISSN 1485-6441
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Postal: PO Box 1700, STN CSC, Victoria, BC, Canada, V8W 2Y2
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Housing; mortgage finance; housing policy;
Find related papers by JEL classification:
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
- R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-04-15 (All new papers)
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