Housing Storm Brews Abroad As Rising Rates Threaten Foreign Markets
• While the US housing market is stable, markets abroad with more adjustable rate mortgages face stormy conditions due to high inflation and interest rates • Foreign markets have seen housing prices rise steeply while income growth stagnated, widening affordability gaps • In the UK, 13% of mortgage holders are at risk of falling behind on payments due to rising rates • Lenders abroad face having many customers unable to make loan repayments, unlike the US where loans are securitized • Banks abroad may need to collaborate with governments to assist distressed consumers, as Canada has done, and explore innovative personalized solutions