Tuesday, August 11, 2015
By Admin


We've spent a good deal of time in recent blogs looking at the return of the first time buyer, after many years of relative absence.

The key reason behind the slump in getting on the house ownership ladder was, of course, the Great Recession. Huge job losses and less available credit, plus the general uncertainties of those very unfortunate few years, saw a diminution in enthusiasm and actual ability to buy a first home.

Last month, however, we reported that the first time buyer is well and truly back after a long general absence. As we said then, it is really difficult to overstate the importance of this development, as it supercharges the entire home buying chain. If you're a seller, no matter where your home is positioned in the market, it will either directly or indirectly benefit from increased activity at the lowest price levels, as more first timers facilitate a move for those whose home sale depends on a vibrant pool of "ready and able to purchase" newcomers, creating a domino effect as more home owners are able to move upscale.

The even better news for sellers is that, according to recent reports, another significant group of buyers is set to make a comeback, after another absence enforced by the recession years.

An article at realtor.com suggests that 2.2 million "boomerang" home buyers will be able to buy a home over the next five years. Sounds good, but what, you may be asking, is a boomerang buyer? Essentially this term encapsulates those unfortunate individuals who ran into financial difficulties during the slump. They may have suffered a big drop in their credit rating, possibly due to a short sale or foreclosure on their property.

To re-enter the mortgage market, one has to have no unpaid judgments, garnishments or outstanding liens, no accounts past due, a FICO credit score of at least 620 and have allowed sufficient time between the negative event that caused the original issues (four years after a short sale or seven years after a foreclosure).

Transunion, one of the three major credit reporting agencies, has estimated that, in the coming five years, 2.2 million of the remaining 5.7 million former homeowners will have rebuilt their credit sufficiently to successfully apply for another mortgage. The company also reckons that 58% of those individuals who have already rebuilt their credit have yet to re-enter the mortgage market, possibly because they are unaware that they are eligible to borrow again. Indeed, if this sounds like you, then you are strongly advised to check the current situation. The present climate of low down payment mortgages for qualifying buyers and still very low mortgage rates, together with sensible home prices, is too good an opportunity to miss, if you can possibly take advantage of it all. Why not click here to start the ball rolling.

These trends bode very well for home sellers and investors, who can all look forward to strong continued growth in demand. Perhaps of equal importance will be the cumulative effect of increased buyer confidence, moving forward, that the tough times we all went through can be consigned to history.

It should be pointed out, of course, that rebuilding one's credit requires patience and sustained discipline. It's a tribute to the resilient nature of the people of this wonderful country of ours that, during this year, 700,000 US consumers will be capable of re-entering the housing market.

This amazing year in real estate has just become even more astounding. Call us today to make the most of it.

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