A Comparative Context for U.S. Housing Policy: Housing Markets and the Financial Crisis in Europe, Asia, and Beyond
Bipartisan Policy Center
Download Document| Date Published | 2012 |
| Version | |
| Primary Author | Ashok Bardhan, Robert Edelstein, Cynthia Kroll |
| Other Authors | |
| Theme | Comparing Housing Finance Systems |
| Country |
Abstract
This paper compares housing markets and housing finance institutions around the world to better understand how economic, historical, regulatory and institutional factors influenced national economies and global housing markets during the financial crisis. By reviewing a range of country settings and experiences, we seek to highlight significant characteristics of the U.S. housing market and finance system. The U.S. mortgage system is complex, compared with systems in other countries. It offers a wide range of loan choices for borrowers and a variety of capital sources for lenders. About two-thirds of U.S. households own their homes, similar to rates found in many other parts of the world, but the U.S. government’s role in housing production is relatively small. The U.S. housing finance system stands out for having a mortgage interest tax deduction, a relatively high proportion of long-term fixed rate loans, no fees for mortgage pre-payment, and a predominance of non-recourse loans (mortgages secured only by the house and not the borrower’s other assets).