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56 | Th e M Rep o RT o r i g i nat i o n s e r v i c i n g a na ly t i c s s e c o n da r y M a r k e t ANALYTICS The LaTesT return Buyers are expected to give Housing Market a Boost Data shows that nearly 1.5 million distressed borrowers will return to the market in the next five years. r ecent research from the National Association of Realtors (NAR) shows that distressed buyers are slowly but surely making their way back to the housing market. In fact, according NAR's report, nearly 1 million borrowers who were foreclosed on, short sold their home or received a deed in lieu of foreclosure over the last eight years have already purchased a new home. Another 1.5 million are expected to do so over the next five years, as they once again become eligible for financing. Approximately 350,000 borrowers eligible for re- purchase are currently unable to do so due to tight financial markets, and as many as 260,000 borrowers may never return to homeownership at all, the report says, because their former loans were backed by loose lenders. To get this data, NAR studied various factors, including the time required to repair credit scores, the time borrowers must wait to be re- eligible for financing, the borrower's credit profile in relation to current underwriting standards, the time required to save for a down payment and the buyer's overall desire to buy or own a home again. In the end, the NAR report revealed some interesting facts, including which states are more popular with these returning homebuyers. It seems that California has seen the most re-purchase buyers to date, while Florida came in at a close second. Other top states included Nevada, Arizona, Georgia, and even Texas, despite current high prices in the marketplace. Moving forward, the report states, Florida will likely catch up to California, while Illinois and Georgia will see jumps in return buyers. North Carolina is also expected to join the list of states popular with re- purchasers, and Virginia will likely drop off entirely. Changing federal regulations on underwriting, as well as new credit scoring models, may help many more of these distressed buyers return to market. As the report says, "New credit scoring models that utilize rent and utility payments can help shed light on the risk posed by these return buyers. These innovations will improve the propensity of these borrowers to return and gain access, while reducing their risk to the FHA, VA, GSEs, and private mortgage insurers." As more than 9 million borrowers lost their homes between 2006 and 2014, it will take some time for the market to fully recover. Over the next nine years, however, a significant number of return buyers should rejoin the market. "The country and housing market are still healing from the collapse of the foreclosure and distress sale wave," the report reads. "As home prices rise and the economy improves, these trends will abate, but there remains a large reserve of former owners who have the desire and ability to return to the market. New credit models and financing opportunities combined with fundamental changes to the mortgage origination process will help to ensure that soundness of the market as these borrowers return." single-Family new Home sales Jump nearly 20 Percent year-over-year Despite annual growth, numbers actually declined for the month. a ccording to a recently released joint residential sales report, the U.S. Census Bureau and HUD estimate that 481,000 new, single-family homes were sold in the United States in March. This is 11.4 percent below the revised February sales numbers of 543,000. However, when com- pared to March of one year ago, they're up significantly—jumping 19.4 percent from 403,000. The report also reveals that the median sales price of homes sold in March was $277,000, while the average price was $343,000. Additionally, by the end of March, the number of new homes on the market was 213,000. At the current sales rate, this supply should last approxi- mately 5.3 months. Results of the report are gathered through sample surveys, and the majority of houses are chosen randomly from selected building permits. Census field representatives collect the data, visit permit offices, and track when single-family units are started, completed and sold. The estimates are often revised, as data is updated and collected on an ongoing basis. Typically, these revised numbers are released a few weeks after the original reports, and they do not represent a major shift or change in trends. HUD and the Census Bureau release residential sales reports on a monthly basis. April's report will now include estimates of houses sold and for sale by con- struction stage, both on a season- ally adjusted and a non-seasonally adjusted basis. Historical data on these numbers will be available through the Census, dating back to January 1999. In addition to improving new home sales, Auction.com announced recently that exist- ing home sales are on the rise, too. In its April 2015 Real Estate Nowcast, Auction.com revealed that targeted sales rates of exist- ing homes would be 5.31 million for April, up 2.3 percent from March and more than 11 percent from April 2014.