They may have lost their house to foreclosure, but they didn’t lose the desire to own their own home. Between 2006 and 2014, approximately 12.8 million homes entered the foreclosure process; almost 30 percent of all households with a mortgage. Of those, 9.3 million borrowers went through foreclosure, short sold their home, or received a deed in lieu, according to the National Association of Realtors.
Referred to as “boomerang buyers,” this segment of the housing market understands much of the home buying process and likely will be more reasonable about their next purchase decision than many first-time buyers.
Why boomerang buyers will drive 2018 real estate trends
The wave of foreclosures peaked in 2010. Almost 2 million borrowers who had their credit damaged by foreclosure have now passed the seven-year waiting period. According to Fannie Mae’s Waiting Periods and Re-establishing Credit standards, millions of boomerang buyers are capable of buying another home. Borrowers who are able to document extenuating circumstances can reduce their wait time to as little as three years.
The housing market has been slow to recover in large part because boomerang buyers have been slow to buy another home. Not all of those who lost a home during the housing market collapse will buy again. Many would like to but aren’t sure about their capability to obtain another mortgage.
Marketing to boomerang buyers
Establish yourself as the Realtor who understands them and their circumstances. Utilize testimonials to show you can help them again realize their dream of homeownership. There have always been boomerang buyers, but never a pool of potential boomerang buyers this large.
Speak directly to them in your newsletter and on your social media channels. You know they once owned a home and are now renting. Talk up the benefits of owning a home over renting and offer information on available loan programs. Those who still desire to own a home will contact you.