Mortgage banking numbers out of the UK for Sept showed a 27% decrease in new mortgage applications compared to last year. Consumers, who are obviously quite shaken by the credit crunch, have not been acquiring new mortgages as they have in the past.

The numbers reflect an international trend which can be seen through most of Europe, Australia, and North America. People are not willing to get new mortgages while housing prices remain so highly volatile. In large metropolitan areas like Chicago, new home and existing home sales are off by as much as 20% from last year. With trends like this happening, its no wonder people are steering clear of new home purchases.

The end result of fewer people getting loans and the crack down on credit has also causes mortgage interest rates to go up. This too is fueling the buying drought and will likely make new home speculators think twice about buying. The end result will be lower home prices in the UK and throughout the US which hopefully will lead to an increasing buying trend and bring the real estate marketing back to life again.

However, don’t expect a turn around like that to happen for at least another year.