Home buyers in retreat 11 March 2010 5:33PM John Kavanagh Higher interest rates and worsening affordability are driving home buyers out of the market. Australian Bureau of Statistics figures published yesterday show that the number of finance commitments for owner-occupiers fell 7.9 per cent from December 2009 to January 2010 (using seasonally adjusted figures) and fell 21 per cent from last year's peak in June.The number of finance commitments for owner-occupiers has fallen from 64,776 a month to 51,056 over a six month period.The value of finance commitments for owner-occupiers fell five per cent from December to January and fell 15 per cent from the September peak. In that period monthly loan values for owner-occupiers have fallen from $17.4 to $14.7 billion.According to figures issued by RP Data-Rismark last week, average Australian home prices across all metro and non-metro regions are 4.6 times average disposable household income. During the GFC Australia's home price-to-income ratio fell to a low of 3.9, a result of dwelling prices declining. The 11 per cent growth in dwelling prices in 2009 has seen the ratio return to its pre-GFC level.The withdrawal of the First Home owners Boost has also taken its toll. First home buyers accounted for 20.5 per cent of all dwellings financed in January, down from 21 per cent in December and well below the peak of more than 28 per cent in April and May last year.First home buyer numbers may continue to fall. According to a Mortgage Choice first home buyer survey, published last week, 28 per cent of people who said they were looking to buy their first home will reconsider their decision if rates go up by more than two percentage points.With house prices on the rise, investors are getting back in the market. The value of loans to investors rose 0.9 per cent from December to January.The mortgage aggregator AFG reported on Tuesday that 34 per cent of all mortgages arranged by its brokers in February were for property investors. AFG said that was a 25 per cent increase over the number of investment loans it recorded six months ago and the highest percentage AFG has ever recorded.Fixed rate loans made up 2.5 per cent of dwelling finance in January, continuing the fall in share that stared in June last year, when the fixed share of the housing finance market peaked at eight per cent.Despite all the talk about renewed competition in the mortgage market, yesterday's ABS figures show that banks have 94 per cent of all outstanding mortgages provided by approved deposit taking institutions. That share is unchanged from December and slightly higher than September.The bank's share of lending in January, $13.3 billion, was 90.3 per cent. Brokers tell a different story. AFG says banks had 83 per cent of its lending in February and Mortgage Choice said the big banks (plus their subsidiaries) had 80 per cent of its lending in the December half.