Feels like a gap in this conversation is finance particulars. APRA policies are why Australia can "afford" adjustable rates. And the difference is where you put the interest rate risk - in households (AUS), or in a government sponsored entity (USA). The US didn't have the kinds of protections APRA provides until after 2008. And those protections are designed so that you push consequences that normally give you price correction onto transaction volume.
Feels like a gap in this conversation is finance particulars. APRA policies are why Australia can "afford" adjustable rates. And the difference is where you put the interest rate risk - in households (AUS), or in a government sponsored entity (USA). The US didn't have the kinds of protections APRA provides until after 2008. And those protections are designed so that you push consequences that normally give you price correction onto transaction volume.