I was having a back-and-forth on HN a while ago with someone who knows more about this, and learned why! It's because of Fannie and Freddie. They're in the business of guaranteeing mortgages in the US, and the US government in turn guarantees Fannie and Freddie (this is why they still exist post-2008 and weren't completely obliterated in the financial crisis, as they should have been).

And it turns out that Fannie and Freddie will not back loans that involve balloon payments. Banks want to make loans that Fannie and Freddie will back, because that basically takes away all their risk. To figure out why this is a problem for shorter loan terms, we have to look at monthly mortgage payments. Here's what US fixed mortgages look like right now (quick glance at bankrate.com), with monthly payments assuming you're taking a $500k loan:

Term Rate Payment
30Y 5.54% $2850
15Y 4.75% $3890
10Y 4.67% $5220

Two things to note:

1. As the term drops, the interest rate does not drop proportionally. 30Y -> 15Y is a 50% drop in term, but only a 14% drop in interest rate. 15Y -> 10Y is a 33% drop in term, but only a tiny 1.6% drop in interest rate.

2. Look at how those monthly payments go up! And we've only gone down to a 10Y term, whereas, from what I understand, Canada's look more like 5Y. So even if we're "generous", and say that going from 10Y to 5Y gives you an interest rate of 4.25%, your monthly payment goes up to around $9260! How many people in the US could afford a $9k monthly mortgage payment on a $625k home (assuming 20% down payment, which is standard in the US)?

Canada solves this with a balloon payment. If you're Canadian I assume you know this already, but for everyone else: essentially, for nearly all of the term of a Canadian mortgage, your monthly payment is much lower than the numbers calculated above. And then, near the end of the loan term, you make up for it with a giant "balloon" payment. Americans are conditioned to think this is scary, but in practice, what happens in Canada at the end of the loan term is that the homeowner either sells the house and moves (and thus pays off the remainder of the mortgage with proceeds from the home sale, before starting a new 5-year loan term in their new home), or they refinance and start a new loan term. (I've gotten this from a random discussion on HN, not my own research, so please correct me if I've gotten anything wrong here.)

And, as I said, this can't work in the US because Fannie and Freddie won't back loans that include balloon payments, so banks don't generally offer them. Many do offer 15Y and 10Y fixed-rate mortgages, but they have much higher monthly payments, so most borrowers stick with the 30Y mortgage, especially when interest rates are at their lowest, like they have been for the past decade+.

The alternative in the US is the adjustable-rate mortgage (ARM), usually offered as a 5/1 or 7/1. It's a 30-year mortgage where you get a fixed rate for 5 (or 7) years, and then your rate is adjusted to market rates every year for the next 25 (or 23) years. The interest rates are even lower; for example, the 5/1 ARM is at 3.91% right now, so the monthly payment ($2360 for our $500k loan) is lower than even the 30Y fixed. But many people view them as risky, and like the comfort in knowing that their interest rate will be locked in for 30 years, even if it's a little higher. Given that rates are going up now, though, I expect ARMs will become more popular, as people will predict/hope that rates will be lower in 5 (or 7) years, and they can refinance with a 30Y fixed -- or another ARM, if rates haven't gone down much, or, worse, have gone up.