Do you think the American Dream has returned?
The American Dream Returns
During the housing crisis, many Americans lost their homes to either short sales or foreclosure. Some of these people were forced to either wait for a certain period before they could qualify for a mortgage. Yet others could get a mortgage relatively quickly, but the rates would be extremely high. However, there are signs that many are planning on buying their own home again because the waiting period is now over for them. And once again, they’re ready to realize the American Dream of owning their own home.
Improved Credit Scores
Between January 2016 and November 2018, 2.8 million former homeowners had the foreclosures and short sales dropped from their credit reports. Many have already purchased their new homes. And more than 50% of the remaining people have credit scores which will allow them to qualify for a mortgage.
According to a recent survey, 6% of Americans who lost a home to either a short sale or foreclosure plan to buy one this year. In addition, 39% plan to purchase one in the next 3 years, while 58% are planning within 5 years. This is a significant number of Americans who are, once again, welcoming the return of the American Dream. However, nearly a third of those Americans report that they’re afraid to own a home again.
The Economy Aids Buyers
Many of these potential buyers have concerns. Since the 2012 bottom of the real estate market, home prices have risen over 50%. And these prices are now, nationally, 11% over the 2006 peak. And many are concerned about another potential housing bubble. However, credit standards are tighter now. Lenders no longer grant mortgages to anyone who can fog a mirror and has a decent credit score. Today’s buyers need to actually prove that they have the necessary income to purchase a home. And this was not the case during the housing crisis. When you take the fact that wage growth has increased since then and couple that with low mortgage rates, there’s a much more stable market out there today.
Many of these potential buyers are being careful. They’re not ready to spend as much as the mortgage lenders qualify them for. They’re, as a rule, opting for smaller, more affordable homes in the hope that they’ll better be able to withstand another bubble.
If you’re one of the many who have been patiently waiting for your own American Dream to return, call us. We can help you, as we’re helped hundreds of others achieve the American Dream.
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