The damage done to the housing market during the economic downturn is showing significant signs of repair. Between 2006 and 2014, nearly 9.3 million borrowers were either foreclosed upon, received a deed in lieu of foreclosure, or short-sold their home. According to a report issued by the National Association of Realtors, roughly a million of those former homeowners have already purchased a new home. Additionally, the report estimates that roughly 1.5 million buyers will return to the market within the next 5 years
California has seen the largest number of return buyers, with around 260,000 since 2006. These buyers are expected to have an even greater presence in the next 8 years, as credit scores continue to recover and lender overlays begin to normalize. Further, new credit scoring methods which take into account rent and utility payment history could help boost scores faster for some hopeful return buyers.
While there's still a long road ahead for many formerly distressed owners, it is a good sign to see so many of these people successfully re-realizing their dream of homeownsership, especially in the face of much more stringent lending requirements.
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