So-called “boomerang buyers” who lost their homes to foreclosure more than seven years ago are slow to return to homeownership, despite being eligible to buy property once again.
CoreLogic’s senior economist Kristine Yao told Mortgage News Daily that most boomerang buyers have had previous blemishes erased from their credit histories by now, but many are unwilling to consider buying.
Yao said that around 1.9 million of the 3.1 million homeowners who lost homes to foreclosure between 2007 and 2013 have now passed the seven year mark, which is the usual waiting period before they can apply for credit again. But less than half of these people are buying again.
CoreLogic says around 150,000 boomerang buyers do return to homeownership each year, which amounts to around 12,500 per month. But of the 4.4 million foreclosures seen since 2000, less than a quarter have since returned to the housing market.
The sobering news comes after optimistic forecasts from economists that boomerang buyers would have a big impact on housing once their waiting period had ended. But reality proves that’s not the case, with many perhaps unwilling to risk getting burned a second time.
Boomerang buyers are more prominent in certain states, mostly those that saw the highest numbers of foreclosures back during the crisis. For example, Arizona, Michigan and Nevada have all seen 32 percent of foreclosed homeowners buying again, around 10 percentage points above average. Meanwhile, around 24.8 percent of previously foreclosed homeowners in California have returned, while 20.3 percent in Florida have also bought again.