While recent data for the United States is often regarded as showing signs of stabilization in the housing market, it is far from certain that downward trending is finally over, if one takes into account the possible effects of an ageing population that the Japanese experience suggests.
It is critically important to appreciate that our framework sets limits on the size of mortgages: the LTI and LTV ratios are not targets but ceilings. In buying a home, households should take into account the risk protections offered by higher deposits, meaning they have less reliance on mortgage debt.