The housing market is recovering and people are getting more positive again. What really slowed the recovery was the backlog of home owners in distress, owing more on their home that the market value. Experts agree we are nearing the end of that cycle. Here’s a quote from Celia Chen, the Senior Director at Moody’s Analytics:
“The forces pulling the homeownership rate lower are past their apex. House prices are rising, but remain affordable at 21% below peak even as rents rise. Some who lost homes early in a crisis can now qualify again for mortgage loans.” She’s talking about those boomerang buyers. “As housing recovers and consumers again see prices rising steadily, perceptions will swing back to favor homeownership.”
Even the boomerang buyers, those who went through with the worst of it, had to sell their house either as a shortsale or as a foreclosure; they’re back in the market now in droves. And there was just a recent update by HUD showing that people who lost their home through a foreclosure,short sale, and bankruptcy may be eligible to finance their home again in as little as 12 months, not that two years or three years they’ve talked about in the past. This is a reduction from the previously required minimum of 36 months from the date of the most recent event. Released August 15th, just a few weeks ago, HUD provided guidelines under the back?to?work extenuating circumstances,meant to ease the path for homeownership for many.
So what is taking place right now? Those people who lost the house to short sale, foreclosure, or bankruptcy, many of them, based on some criteria, will be able to buy a house again within 12 months of that event, cutting back that ? in some cases three years, and in some cases they could squeeze in a little over two years ? cutting that back to 12 months. And the resource section of KCM will actually give you the URLs so that you can get more information on this if you’re working with those boomerang buyers, and they are getting to be a bigger and bigger part of the market. But even that group,the group that went through the worst of the housing crisis, is back looking to buy homes.