Effects Of Boomerang Buyers

Improved Essays
The meltdown of the real estate and mortgage market had a significant negative impact on the United States economy and countless American families. This was caused by the housing bubble in which house prices peaked to unsustainable values and then burst causing a depreciation in property value. The consumers bought properties at astronomical prices. In order to pay for these properties, the consumers had to take out loans in which a limited financial background check was done to see if the individual could keep up with the payments. Due to the extreme cost of housing, the consumer was not able to pay back the enormous loan which lead to the foreclosure of their properties. This ultimately lead to the crash of the real estate and mortgage market because no one was able to afford housing to the surge in prices, and if they took out a loan they could not repay it which ultimately lead to a depreciation of housing prices. Boomerang buyers have helped revive the real estate and mortgage market. A boomerang buyer is a person who had lost a home due to foreclosure, but now is buying another home. These people are familiar with the home owning process, and are ready to own their own home in a better priced housing market. These boomerang buyers …show more content…
Home buyers are now more successful and able to buy homes today. The mistakes of the past have lead to the increase of financial checks which verify the individual’s ability to pay back the loan on the house. Thus, it is less likely the individual’s home will be foreclosed upon. The transaction is safer. Home buyers have lower interest rates on their mortgages and are more likely and able to pay them back. Overall, the investors have learned that you have to be willing and able to pay the mortgage on a house if they are going to get involved in the house market, or else they will not be successful and foreclosure may

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