How the Big Banks Have Created a Debt Monster
As i’ve mentioned in previous posts such as Leverage and Debt Driving Real estate prices, much of our housing woes are a direct result of risky banking practices. I find it amazing that people are somehow surprised that home prices are rising because banks are lending more and more money. The bigger the mortgage the bigger the home you can buy. And yes mortgages are getting bigger, much bigger. Canadian mortgages now topple 1.4 trillion dollars (not billions despite the picture below), while coincidentally Vancouver prices have soared, ranking as the least affordable city out of the 40 largest Canadian cities and a multiple of 11.8 times median household income required to buy a home.