Phoenix boomerang buyers revisiting home ownership after housing crisis
Aug 25, 2015, 3:43 PM
(AP Photo/Julie Jacobson, File)
Boomerang buyers are swinging back into the housing market.
A study from the National Association of Realtors shows many of those buyers who lost their homes during the housing crisis have restored their credit and are ready to become homeowners again.
Phoenix, one of a number of cities hit hard by the market meltdown several years ago, is now seeing an increase in return buyers.
Tina Tamboer of The Cromford Report told KTAR News 92.3 FM’s That Real Estate Show we should expect to see more boomerang buyers return to the Phoenix market over the next few years as they get their credit in order.
“Most people have to wait seven years for conventional financing after foreclosure,” Tamboer said, adding the housing crisis began in 2008.
Still, even as they make their return, Tamboer said we may not see as many boomerang buyers in the Phoenix area compared to other markets due to the short supply of homes under $250,000 in the Valley.
Another study by Realty Trac also listed Miami, Las Vegas and Tampa, Florida in the category of markets that should expect to see an increase in boomerang buyers.
An estimated 700,000 of the 7.3 million homeowners who experienced foreclosures or short sales during the housing crisis are now eligible to get a mortgage again this year. Additionally, the NAR study estimated 1.5 million formerly distressed owners will likely buy homes again over the next five years as they become eligible.
The NAR’s chief economist, Lawrence Yun, said the use of new credit scoring models can help improve eligibility for home ownership among return buyers and help lenders examine buyers’ credit risk more thoroughly to avoid the pitfalls of the loose lending standards of the mid-2000s.
He also said borrowers with restored credit are encouraged by the long-term benefits that home ownership provides in a stronger economy and more stable jobs.
Join Realtor Diane Brennan for That Real Estate Show Sundays at 8 a.m. on KTAR News 92.3 FM.