As the United States continues to grapple with the fallout of its housing bubble and blow-up, recent research from the International Monetary Fund uncovers some startling statistics about other countries that could be headed toward their own U.S.-style housing crises.
While home prices have fallen in about half of the countries the IMF tracks, they've risen in the other half. Those trends coupled with data used to gauge the affordability of housing and whether homes are valued correctly seems to indicate prices have significant room to fall.
In other words, home values in many countries are inflating much like the run-up the U.S. saw in the early 2000s and could be headed for a correction.
"For all but a handful of countries, these ratios [home prices-to-income and home prices-to-rent] remain above, and in many cases well above, their historical averages, signaling that there may be room to fall," according to the IMF's Prakash Loungani.
Loungani admits there are a ton of factors that ultimately influence the direction of home prices, but looking at the data collected at this point, a few countries stand out as particularly vulnerable to a housing run-up and bust.
Canada, for instance, tops the list of housing price-to-rent ratios, and recent IMF research notes that the house price-to-rent and house price-to-income ratios are 29 percent and 20 percent above their averages for the last decade, respectively.
Housing price-to-rent ratios are also historically high in Norway, New Zealand, Belgium, Australia, France, Finland, Spain, and the U.K., among several other countries.
With the catastrophic housing crisis still a ball and chain for the broader economic recovery in the United States, the prospect of more housing-related crises in other parts of the world could put a serious damper on the global economic outlook in coming years.