It is virtually impossible to not hear, read, or see something in the media on a frequent basis with regards to American housing market. I get asked many times if the Canadian and also the PEI market will follow suit. Even though we Canadians are following suit on the election - our campaign will be much shorter and hopefully less painful.
I by no means have a crystal ball but I do know that most markets in Canada have seen a decline in sales and an increase in listings than this time last year. 2007 was a record breaking year and the media was discussing how great it was and of course all of us in the Real Estate Sales were telling people that it was very busy thus some people who were going to buy in 2008 decided to do so in 2007 thus taking them out of the market for this year. When I compare 2008 to 2006 it shows an increase so things are still pretty good. The time to buy is when you feel it is time to buy - emotionally and financially. Make sure you discuss your mortgage options with your lender and find out what mortgage product suits you not only in rate but term, amortization, portability etc.
In the US homeowners are allowed to claim their interest payments on their mortgage when they filed their income taxes so many would continue to borrow against their home to finance their car, boat, vacation and other things. When the value is going up in the house- more money could be borrowed- but when the market cools than they no longer have access to that money that they may have previously been able to access.
There are all other issues of what is occuring in the US housing market and also with affordability factors in Canada in some markets but I am not an economist and this is just my opinions of what I have heard and read about. We always have to make our own decisions based on what is good for ourselves and our families.