Housing market reports are causing mortgage lending to tighten up.  Remortgage lenders have been turning cautious and pulling their best rates and replacing them with slightly higher interest rate offerings.  The cautious outlook is being caused by the continued gloomy reports from economists on the future expectations of the economy in the UK, the eurozone, and the US.  There is now more pressure to add to lenders as they find out that the US housing market is much worse off than had been previously expected.

The US housing market remains struggling as few buyers come into the market.  There is causing the supply of houses on the market to increase and house prices are falling.  Repossessions continue to be high in the US which is causing the supply of available homes coming into the market to increase despite house construction declining.  Recent information from the National Association of Realtors in the US revealed that they had revised down their number of homes sold in the US in the past years to 14 per cent less.

“Inventories are high relative to sales rates and would be even more so if all those wishing to sell their home actually had the house on the market instead of keeping it off in the face of eroding prices.  The huge supply overhang of existing homes promises to keep pressure on prices and to weigh on demand for new homes and hence on housing starts”, said Joshua Shapiro, chief US economist at research firm MFR.

Housing market reports across the US show that buyers are rare, repossessions are high, and construction of new homes is on the decline.  In some states in the US there is repossession for every 160 homes.  More bleak housing reports are expected in the coming months and with it a further tightening in remortgage and mortgage lending.