Boomerang Buyers. Do you know what they are? Who they are? When they are coming?

Boomerang – are Buyers Ready, Willing, and Able?

Jan 27 2015, 9:26AM

Are you ready for The Boomerang Buyer?  That is the latest wrinkle in the seemingly endless foreclosure saga and there are apparently a lot of them who are now potentially able to affect the trajectory of housing.

Boomerang buyers are former homeowners who lost their homes over the last few years, either through short sale or foreclosure.  RealtyTrac, in a report released on Tuesday, say there are 7.3 million of them and the first wave has passed the seven year mark after exiting homeownership.  This is, the company says, a conservative estimate of the time needed to repair credit and qualify to buy another home.

Boomerang buyers have been around for a while of course.  The term was apparently coined by the Wall Street Journal in 2012.  In October of that year they reported that home builders had been reaching out to those buyers, with one offering materials informing customers of mortgage eligibility rules covering their situation.

Those eligibility rules vary, but it is possible to qualify for Fannie Mae, Freddie Mac, VA, or FHA loans within two to four years of foreclosure with time determined by the amount of downpayment in some cases.  However it takes a lot longer for all of the bad news that usually accompanies a foreclosure to disappear off of credit reports and for credit scores to rise enough to support a loan application.

According to RealtyTrac, the first wave of technically rebounding buyers is relatively small, about 550,000 households, representing those who exited homeownership in 2008.  The group climbs to just over 1 million in 2016 and remains over that level through 2019, peaking at 1.3 million in 2018 and finally dwindling back under a half million in 2022. 

If you would like the information on the makets with the most boomerang buyers contact me 281-751-8167 or via email at tonya@kiliddjian.com