Dive Brief:
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Starting this year, some of the 7.3 million homeowners who lost their property during the housing collapse could become homeowners again, according to real estate research firm RealtyTrac.
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The first wave of that cohort has passed the seven-year window necessary to repair damaged credit and potentially qualify for new mortgages. For others, the window will pass between now and 2023.
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Known as “boomerang buyers,” most of those who suffered foreclosures live in Sun Belt and Rust Belt markets that were hit hardest by the housing crisis. The Top 5 large markets with the most potential boomerang buyers over eight years are Phoenix, Miami, Detroit, Chicago and Atlanta, according to RealtyTrac.
Dive Insight:
Living through foreclosure could make a homeowner think twice about trying it again. So in some cities with large numbers of the former homeowners, home sales won’t improve because prices are too high or jobs are too scarce.
RealtyTrac noted that when a “trifecta” of market conditions materializes in an area, foreclosure casualties are more likely to buy again. The markets where this is most likely lost a high percentage of homes to foreclosure; have a large inventory of homes affordable to median-income earners; and are home to a steady population of Generation Xers and Baby Boomers.
Topping that list are Las Vegas; Merced, CA; Stockton, CA; Cape Coral-Fort Myers, FL; and Modesto, CA.