‘Boomerang’ Buyers Are Slow to Return
Americans who lost their home to foreclosure are slow to return to home ownership, despite being eligible to do so, according to CoreLogic’s Senior Economist Kristine Yao.
Read more: Return Buyers: Housing's Next Boom
It's been seven years since the peak of the foreclosure crisis, and many of these boomerang buyers now have their blemishes erased from their credit histories. But that doesn’t mean they are ready to jump back into home ownership.
About 1.9 million of the 3.1 million home owners who lost their homes to foreclosure between 2007 and 2013 have passed the seven-year mark, the typical required wait period following a foreclosure.
But less than half are buying a home again, even some who are 16 years post-foreclosure, Yao notes.
About 150,000 boomerang buyers return per year – or 12,500 per month – to the housing market, she says. Of the 4.4 million foreclosures of owner-occupied residences completed since 2000, Yao says that less than one-quarter of owners have since returned to the housing market.
Economists had predicted that boomerang buyers would have a big impact on home ownership in the coming years due to their size.
Some states are seeing a pick up in boomerang buyers, mostly in states that saw the biggest foreclosure rates during the housing crisis. For example, returning home owners have been most pronounced in Arizona, Nevada, and Michigan, which each have seen 32 percent of foreclosed home owners purchase again. That is about 10 percentage points higher than the national buyer share. California has seen about 24.8 percent of foreclosed owners return while Florida posts a 20.3 percent return.
Source: “Buyers Not ‘Boomeranging’ Hastily,” Mortgage News Daily (Aug. 3, 2016)
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