Home ownership levels are continuing to drop in many countries despite stable or positive outlooks for most mortgage markets, according to the annual Global Housing and Mortgage Outlook report from Fitch Ratings.

As a result of market dislocations post economic crisis, home ownership levels face challenges as large foreclosure pipelines are expected to displace owners in some countries such as the US, Spain, and Ireland, whilst new lending remains well below pre-crisis levels, particularly in the Eurozone periphery.

Stretched affordability, especially in Australia and parts of the UK and a growing preference for renting, are also having an impact. The percentage of home owners in the US has fallen to 65% from 69% in 2006 and the report suggests that the steady decline has been mainly driven by foreclosures, mortgage scarcity and unemployment.

Policy actions in Hong Kong and Singapore are targeting a soft landing but Hong Kong risks a sharp price correction given its significant affordability stretch. Fitch expects Australian house prices to continue to rise albeit at a lower rate than the past 12 months.

Gross new mortgage lending should rise in all but seven countries; the US, France, Greece, Portugal, Hong Kong, New Zealand and Belgium, as consumer confidence generally returns, but policy measures, borrower caution, tight credit and low savings in some markets may be a constraint.