The Importance of Boomerang Buyers

Green Escrow | Real Estate News

Boomerang buyers – those former home owners (7.3 million!) who lost their homes to foreclosure or short sale during the housing bust (2008 or so…). Many have spent the last several years rebuilding their credit and now they’re ready to buy!

According to RealtyTrac, Generation Xers and Baby Boomers make up the majority of these boomerang buyers and most will be looking to buy in areas where a sizable percentage of units were lost to foreclosure but where prices still remain affordable. They will also look to buy where there the population consists of other Generation Xers and Baby Boomers.

Former Homeowners Buying Again

Market News

The latest trend in the national real estate market is that former homeowners who lost their homes in the recent recession are starting to re-emerge and looking to buy again. These homeowners – frequently called “boomerang” or rebound buyers – are estimated to be as many 7.3 million (!) and RealtyTrac predicts that many will return to the housing market during the course of the next eight years.

Of course, many of these former homeowners either lost their homes through foreclosure or went through a short sale. To qualify for a home loan again the waiting period is generally seven years although extenuating circumstances – serious health problems, death of a primary provider, divorce, job loss etc. – may reduce the wait time to three years.

Finally, these buyers often have other credit issues as well. Reducing their current debt should be a priority as being close to the maximum on a line of credit is considered a financial risk. Then, of course, there’s the down payment…

Regardless of the obstacles, even the potential return of these former homeowners is good news for the real estate market.