Many homeowners who have previously allowed a home to fall into foreclosure are ready to re-enter the housing market, according to a recent study by LoanSafe.org and YouWalkAway.com.
Nearly 80 percent of consumers who lost their homes during the financial crisis are interested in buying again, and 41 percent say their income is higher than when they first purchased a property. These so-called “boomerang buyers” also say that their debt obligations are not as severe as they were when they lost their home, with 63 percent reporting lower debt and 30 percent “significantly lower” debt.
The study finds that boomerang buyers are willing to invest more into the purchase of a new property than in the past: more than 50 percent say they plan to make a down payment of 10 percent or more as part of their next home purchase. Higher down payments suggest that “after foreclosure” buyers are committed to avoiding the same mistakes the second time around, the report concludes.
“Alienating this large and growing pool of potential buyers does not bode well for the market in an environment where natural housing advancement has been largely disrupted, Jon Maddux, co-founder of AfterForeclosure.com, in a statement. “College students are graduating laden with student debt and limited employment options, baby boomers are aging in elevated numbers and those who waited on the sidelines during the crisis already purchased during the small opportune window between crisis and recovery. There are literally millions of ex-homeowners who may be qualified to buy a home again, but are unaware of the help that is readily available to them through existing and new loan programs.”
According to a poll of LoanSafe.org and AfterForeclosure.com’s members:
79 percent of those who lost their homes during the crisis are interested in buying again.
41 percent report that their income is higher than when they first purchased and 24 percent report that it is the same.
63 percent report that their other debt obligations are lower (30% said “significantly lower”) and 22 percent report it being the same.
46 percent report the desire to purchase in a lower price range and 29 percent report wishing to purchase within the same price range.