Home as asset or as ATM? Canada vs the US

Thanks to the right set of incentives, Canada’s homeownership rate has surpassed the United States’ for the first time in years. U.S. policymakers should be paying attention, as Sean Speer and I argued in the pages of the Wall Street Journal on June 3rd. In Canada, home owners are rewarded for building equity, whereas in the US the rewards are for treating your home as an ATM. Perhaps Washington might take a page from Canada’s book, especially now that interest rates are so low and therefore the benefit of deductibility for mortgage interest is relatively small.