Homeowners who lost their homes to foreclosure and are now looking to buy again are becoming a growing force in the market.
These “boomerang buyers” who defaulted or sold via a short sale in 2007 through 2012 will return as potential owners and number 500,000 a year in 2013 through 2016, according to John Burns Real Estate Consulting.
More than 4.7 million homeowners are estimated to have lost their home to foreclosures or short sales since 2007. Seventy percent of them will likely return to home ownership within eight years of their short sale or foreclosure, Burns said.
With the housing downturn starting about six years ago, this could be the first big year for boomerang buyers. This group could possibly account for 10 percent of home sales this year, Burns said.
And with home prices still relatively low and mortgage rates hovering at record lows, some boomerang buyers may even qualify for a mortgage that is cheaper than their previous one.
“Their time out of the market may be shorter than many Americans might expect,” USA Today reports. “People who go through foreclosure can rebuild credit records and qualify for home loans again in three to seven years if they manage their finances well.”