Why We Expect to See an Increase in the Market in 2017-2018
Get ready there is a new group of home buyers about to hit real estate markets all across the nation; they are called the “Boomerang Buyers.”
Over 7 million families lost their homes to foreclosure between 2007 and 2014 during the Great Recession. An additional 2.3 million sold their homes via short sale or selling for less that was owed. Both of these actions caused financial and emotional upheaval to families. Up to 7 years later, many of these families are ready to become homeowners again. They are being called “boomerang buyers” because they are coming back to the housing market.
Here is the what, who, how and why of the expected burst into the market.
What is a “boomerang buyer”?
The general definition for a “boomerang buyer” is someone who was a former homeowner who was forced to go through a short sale, foreclosure, or bankruptcy in the past, and who has since been saving money for the down payment and the expiration of the waiting period, in order to qualify once again for a mortgage.
Who is a “boomerang buyer”?
“Boomerang buyers” range in age from early 40’s to mid-50’s who have a small to moderate down payment to make toward a re-purchase of a home once again and have re-established good credit.
How can they re-emerge?
For those who lost their homes, borrowers have typically been required to wait 3-7 years before trying to obtain a mortgage. The good news is the expiration of the waiting period is coming to an end.
By the numbers:
7 years – The amount of time before a foreclosure stops being reported on your credit report. Both Fannie Mae and Freddie Mac require the 7 year waiting period after a foreclosure. There is an estimated 550,000 former homeowners are reaching this milestone and may be ready to own a home again.
3 years – The amount of time FHA/HUD will consider granting a new mortgage to a borrower as long as their credit has been reestablished. If there were extenuating circumstances, the wait time may be shorter.
2 years – both Fannie Mae and Freddie Mac will consider granting a new mortgage if your home was sold via short sale or deed in lieu of foreclosure and foreclosure was avoided.
Rising rent prices and the strong desire to own once again now that the economy is growing are prompting these “boomerang buyers” back into the market. With most being market savvy, they understand that interest rates and home prices are rising in most American markets. To wait, will mean higher interest rates and paying more for a home. They want back in.
It’s all good news for the housing market which has been tanked for so many years. Markets have stabilized, and many are showing early signs of a major rebound. The states reporting the highest numbers of emerging “boomerang buyers” are California [Riverside and Los Angeles], Arizona [Phoenix] and Florida [Miami metro and Cape Coral]. Even if you have had a previous short sale, foreclosure, or bankruptcy you may be eligible for some of the down payment assistance grants to help you obtain homeownership. Please contact our team for more details and to answer all of your questions.
The Certo Team 55 N. Arizona Place Suite #103 Chandler, AZ 85225 602-429-6789
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