One of the most common questions I get asked these days is what is going on with the housing market in the U.S. and can we expect the same thing to happen here? Whatever happens in the U.S. economy will eventually happen here too, right? I'm certainly not an economist, but I will try to answer the question based on what the experts are saying.

Over the past 2 years, the housing market in the U.S. has been hurting-big time. The weak housing market combined with the high Canadian dollar have some people wondering if it would be cheaper to drive down to Detroit, buy a house and have it shipped back to Toronto! While I wouldn't recommend buying anything in Detroit, the disparity between the housing market in the U.S. and in Canada has probably never been greater.

While there have been some recent reports suggesting a slow down may be on the horizon, most of the evidence points to the fact that key differences in lending practices in Canada versus the U.S. means that the struggles going on South of the border are likely not headed here.

In the U.S., the dreaded subprime mortgage market makes up about 20% of all mortgages versus only about 5% here. In the U.S. it is generally much easier to qualify for a mortgage than it is here, and our mortgage insurance policies are also stricter. Also, unlike in Canada, mortgage interest in the U.S. is tax deductible, thereby enticing those who probably should not be buying a house into finding a way to get it done.

Bottom line is our lending practices are strong and demand for housing is very strong. In the short term, we have little reason to believe we are due for a slow-down like the U.S. is currently experiencing.

Photo from Ryan Coleman.