July 23, 2014 | Updated 12:00am

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Thursday, July 17, 2014, 12:03pm

CoreLogic Economist: Housing Market Choked

Mark Fleming, chief economist for housing data and analytics firm CoreLogic, says the U.S. housing market is currently suffering from both pent up demand and pent up supply.

As the shadow inventory of foreclosed and distressed homes is dwindling in most of the country, fewer low-priced homes are hitting the market, Fleming wrote in an analysis in CoreLogic's monthly Market Pulse report. At the same time, many existing homeowners are locked in to extremely low interest rate loans on their current properties and are therefore reluctant to list their homes for sale, with almost half of all mortgaged homeowners now enjoying rates below 4.5 percent. Many other homeowners remain, if not outright underwater, at least "under-equitied," meaning that selling their current homes would not leave them with enough cash for a full down payment on a new property. While such homeowners can still obtain mortgages through low-down-payment programs, they are required to purchase mortgage insurance, making their monthly payments more expensive.

On the demand side, in addition to the slowdown in purchases from investors as home prices have risen, and the constraints on current owners becoming move up buyers, up to a quarter of the potential homebuyer pool may be being excluded from purchase due to tight credit conditions, Fleming writes.

"[B]ased on the current number of below-640 credit score loans being originated compared to before the housing bubble, approximately one-fourth of the traditional credit-eligible population is not easily accessing credit," Fleming states. More millennials are renting as opposed to purchasing as well.

All in all, these conditions are likely to persist for years to come, making this the "new normal" for the housing market, Fleming writes.

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