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One culprit could be tighter mortgage credit.
The Chancellor's speech at the Mansion House on 12 June, threatening tighter mortgage lending, triggered sharp falls in housebuilders' shares.
The prospect of tighter mortgage rules and higher interest rates hit shares in housebuilders Barratt Developments, Persimmon and Taylor Wimpey.
Now, in this tighter mortgage market, Mr. Grayson said, banks are lending only four to five times a borrower's gross annual salary.
This suggests that in addition to tighter mortgage lending regulation, there is a case for nationalising Fannie and Freddie on grounds that they are natural monopolies.
The combination of weak housing sales, falling home values, tighter mortgage lending criteria and a slowing economy has left distressed homeowners with few options to avoid foreclosure.
Similar(39)
And tighter mortgages since the crash are probably a bigger barrier to would-be homebuyers in most places than a shortage of bricks and mortar.
In addition, high unemployment and tight mortgage lending standards have kept buyers away.
It pointed to "an unusually high cancellation rate" of 68percentt, which it attributed to the tight mortgage market in August and September.
The housing market, which collapsed in the 2007-9 recession, has been a relatively bright spot in the economy this year, although it remains hobbled by tight mortgage availability and continuing foreclosures.
Fannie Mae and Freddie Mac, the biggest sources of financing for American home loans, helped give the market some ballast after the government removed restrictions on the size of their portfolios, offering a chance to ease an extremely tight mortgage market.
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