The number of people who are homeowners is at an all time low since 1997. With only 65% of Americans actually owning their own home, we have seen a 1% decrease of home owners in just this past year alone.
Most attribute these new lows to a number of problems including homes lost to foreclosures, a poor economy with substantial lay-offs, and the stringent restrictions put in place by lenders after the financial collapse.
While this may seem like a terrible cloud looming above the real estate market industry there is a silver lining in if you look hard enough.
The Silver Lining
While it is true that lenders will remain tight with their money in 2012 they will be loosening the reigns a bit. Even with slightly less strict guidelines to get approval on a mortgage it’s not going to be as easy as it once was. Lenders are recommending that you assure you’re prepared for passing the requirements needed to obtain a mortgage and once you’re in position to pass these requirements don’t be afraid to shop around.
The silver lining is that while there has been a decrease in the number of home owners within the past year alone, these same former home owners probably want to get back to where they once were. Many may have faced foreclosure, bankruptcy, or both within the past few years. While they may have actually lost their home a couple of years ago, they could just now be showing up in the statistics.
If this is the case then they have had a few years to recover from their losses, perhaps even bettered their situation by removing themselves from the position of being upside-down with their previous home. Perhaps they’ve had the time to rent while also putting aside a few dollars here and there towards a down payment on another home.
The Former Home Owner/Potential Buyer
While these situations may sound like a mixture of good and bad, the end result is that we may slowly be building a new group of potential homeowners who have recovered economically within the past few years. While they may not be in the position of being the perfect loan applicant they are working towards that direction.
This means a high probability of more home sales coming in the near future as former home owners repair their credit and once again chase that American dream. These former home owners are definitely an influential part of the real estate industry. Their biggest obstacle is repairing their credit and coming up with a down payment; just like everyone else who is thinking of buying a house.
The First-Time Home Buyer
There are also always the first-time home buyers that are anxious to qualify for a mortgage. By following a few key elements these first-time home buyers can quickly establish good habits that can lead to a credit history that will help them obtain their loans. Assuming they’ve learned from the mistakes of others and maintained a fairly good credit score, their biggest obstacle will be coming up with a 20% or larger down payment.
With a large amount of current and former veterans coming home from the war there is a substantial market coming on the scene for VA Loans. In some situations they may not even have to come up with a down payment at all.
Depending upon the loan situation and the amount of money they’ve been able to save they could become a substantial replacement for the 1% of home owners lost within the past year. Add this potential clientele base along with those who were previous home owners we could see a fairly substantial comeback in the real estate market as early as this year.
For more information on how to buy a home, go to http://www.springscleverseller.com or contact Juanita Simkins, Professional Realtor & Expert Negotiator (719) 229-5770