TransUnion forecast: 1.5M boomerang buyers

07/01/2015

TransUnion forecast: 1.5M boomerang buyers

NEW YORK – June 19, 2015 – About 1.5 million homeowners negatively impacted by the mortgage crisis could be on their way to re-entering the housing market within the next three years, according to a new study released by TransUnion. Within five years, that number could swell to 2.2 million.

This year alone, about 700,000 former homeowners – also known as "boomerang buyers" – stand to re-enter the housing market.

During the financial crisis in 2006, 78 million consumers – or 43 percent of credit-active consumers – had a mortgage. More than 8 percent of those consumers were affected by the financial crisis by being 60 days or more past due on their mortgage loan; losing their mortgage through foreclosure, short sale or other non-satisfactory closure; or had a mortgage loan modification.

Only about 18 percent of the consumers affected had recovered by December 2014, according to the TransUnion study. Borrowers must often wait four years following a short sale or seven years after a foreclosure to qualify for a mortgage again.

But for those who have repaired their credit, many of these former homeowners likely will want a second chance at homeownership.

"It's been over seven years since the beginning of the mortgage crisis; this is significant because many derogatory items, such as foreclosures and short sales can prevent consumers from qualifying for a new mortgage for a period of time," says Joe Mellman, vice president and head of TransUnion's mortgage group. "As boomerang buyers who experienced foreclosures or other negative impacts become eligible to re-enter the mortgage market, they may not immediately do so if they are not aware they are eligible again, or feel daunted by their prior experience. Lenders can help consumers ease this transition with credit education programs addressing consumer eligibility, and help them better understand their borrowing options."

The TransUnion study provided the following breakdown of how many boomerang buyers each year could meet requirements to buy again within the next five years:

  • 2015: 700,000
  • 2016: 300,000
  • 2017: 500,000
  • 2018: 400,000
  • 2019: 300,000

Source: TransUnion

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