Market Tightens, With Mortgages Still Out of Reach for Many

NEW YORK (TheStreet) -- Two sets of numbers out this week paint a picture of the U.S. housing market getting healthier, with buyers able to take advantage only if they can wrest a mortgage from a cautious banks.

First on the docket are lower home inventory numbers across the U.S., as measured by Movoto Real Estate. Movoto notes the number of houses for sale on the U.S. market slid by 27% from December 2011 to last month.

That's good for the housing market, and especially so for homeowners, who have seen the value of their homes fall 20%, 30%, and 40% or more over the past four years.

It works like this: When home inventories are reduced, that leaves fewer homes on the market and fewer options for homebuyers. That drives up the price of the remaining homes on the market, and that spills over to nearby homes, where values rise as well.

In other words, lower inventories are an economic driver in the housing market -- they can help turn buyers' markets into seller's markets.

Here's how Movoto explains it in a blog post this month:

Most homeowners are nervous to sell their homes because they are either underwater or believe prices will continue to appreciate. Additionally, we are seeing a rise in investor demand coupled with a decrease in foreclosures.

This small pool of housing inventory pushed prices up significantly the past year. Unless this trend changes, 2013 will only be more of the same.

The Movoto inventory data comes as other housing industry groups say housing affordability set historical records in 2012.

According to the Washington, D.C.-based National Association of Realtors, the NAR's Housing Affordability Index landed at 198.2 in November, the most recent month measured by the association.

That's up from 186 the year before, which set a record in its own right, the NAR reports.