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Keeping Up With the Joneses

Are housing costs more overwhelming in Canada or in the U.S.? A recent study by Point2Homes analyzed the evolution of the housing markets in these countries that share a border to assess their current status.

For the study, Point2Homes extracted historical data on market trends and examined numbers from 2008 and 2018. They looked at key metrics including average home price, rent, homeownership rates, changes in the countries’ median incomes, and the countries’ evolution on the affordability scale for a side-by-side comparison.

The study found that while the average home price in the U.S increased at a much slower rate of 24 percent, the average Canadian had to dish out 56 percent more to buy a home and 25 percent more to rent one. Median incomes for Canadians also rose at a slower pace than their U.S. counterparts at 15 percent, compared with 18 percent for American homebuyers.

According to the study, a decade after the housing crisis in the U.S. some analysts have claimed that Canada faces a similar scenario where household debt currently exceeds 100 percent of GDP.

Looking at historical U.S. housing data, the study found that in the U.S., homeownership rates reached a peak towards the end of 2004, when the percentage of homeowners settled at 69.2 percent, only to start decreasing in 2007. By 2015, the share of homeowners in the U.S. fell to 62.9 percent, a level that hasn’t been seen since 1965, when data gathering was just starting. After three years of recovery, the share of homeowners in the U.S. is currently pegged at 64.2 percent.

Comparatively, homeownership rates in Canada rose at a steady pace for more than four decades hitting an all-time high of 69 percent in 2011, but the percentage has dipped to 67.8 percent following the economic downturn in the country from 2014. Despite these declines, home prices in Canada increased twice as fast as the U.S.

"Due to a staggering 56 percent jump since 2008, Canada’s average home price went from $304,663 CAD to $475,591 CAD in just ten years," the study revealed. "The U.S. market’s increases have been more contained: after a 24 percent increase, the average home price went from $245,200 in 2008 to $303,200 in 2018."

About Author: Radhika Ojha

Radhika Ojha is an independent writer and copy-editor, and a reporter for DS News. She is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her masters degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha, also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Houston, Texas.
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