Within the mortgage sector, new foreclosures have been falling for more than four years and are currently at their lowest level since 2003.
However, mortgage origination is still weak, partly because credit standards remain much more stringent than before the financial crisis but also because mortgage rates have increased by almost 100 basis points over the past year, Standard Life chief economist Jeremy Lawson said.
“Of course, some tightening in mortgage credit standards was desirable, given that poor lending practices were one of the catalysts for the financial crisis,” Mr Lawson said.
“However, the fact that many individuals with relatively healthy credit scores are also struggling to access finance is holding back the housing market and hence the broader economic recovery,” he said.
“Little wonder then that the home ownership rate continues to decline and almost all of the demand for new housing is coming from the multi-family rental sector.”
According to Standard Life, home ownership in the US has been in decline since 2004. In 10 years, home ownership rates have fallen from 69 per cent to 65 per cent.