Top markets for affordable renovated housing inventory

Despite the rapidly deteriorating affordability, there is some hope for homebuyers in the form of renovated homes: properties that have been rehabbed into move-in ready condition after being purchased at auction.

HousingWire Magazine: December 2021/ January 2022

AS WE ENTER A NEW YEAR, let’s look at some of the events that we can look forward to in 2022. But what about what’s next for the housing industry?

Mortgage Tech Virtual Demo Day

Tune in to our live Virtual Demo Day on December 1st at 10am CT to experience demos from the most innovative tech companies in the Servicing, Audit and Post-Close space.

Logan Mohtashami on Omicron and pending home sales

In this episode of HousingWire Daily, Logan Mohtashami discusses how the new COVID variant, Omicron, will impact inflation and whether or not it will send mortgage rates lower.

MortgageReal Estate

Disappearing bankruptcies could start new wave of homebuying

Credit scores hit record high

This year marks the seventh year since the influx in bankruptcy declarations in 2010, therefore millions of Americans will see bankruptcies begin to fall off their credit report.

Over the next five years, about 6 million Americans will have their bankruptcies disappear, possibly sending a flood of more homebuyers into the housing market, according to an article by AnnaMaria Andriotis for The Wall Street Journal.

This chart, which uses data from the U.S. Bankruptcy Courts analyzed by HousingWire, shows Chapter 7 non-business bankruptcies peaked in 2010 during the housing crisis then decreased over the next few years before leveling off in late 2015 to 2016.

In 2010, the number of Chapter 7 bankruptcies, the most common type of bankruptcies which do not involve a plan of repayment and instead liquidate the filer’s assets, increased to nearly 1.14 million. Of those, nonbusiness Chapter 7 filings made up about 1.1 million, according to the U.S. Bankruptcy Courts.

For comparison, the number of Chapter 7 bankruptcy filings among non-businesses in 2007 totaled just more than 500,000, data from the U.S. Courts showed.

After hitting the peak in 2010, bankruptcies once again began to slowly decrease. In 2016, Chapter 7 non-business bankruptcies slipped to 473,673 filings.

Now, seven years later, these bankruptcies will begin to fall off, improving the credit score for millions of Americans, and enabling them to once again consider homeownership.

Credit scores reached a record high this Spring and the share of Americans in the riskiest borrower category hit an all-time low, according to the WSJ article. As bankruptcies continue to fall off credit reports, credit scores will continue to improve, and more consumers could begin to enter the housing market.

This will create even more competition in an already tight market. Home prices continue to increase as inventory levels drop. And experts say don’t expect it to let up anytime soon.

And Hispanic homeownership could also see an increase over the next few years as President Donald Trump and his administration seek to “dismantle” the Dodd-Frank Wall Street Reform Act, which could give lenders more freedom to originate loans outside traditional qualified mortgages. They could then, perhaps, extend more lines of credit to the Hispanic population.

U.S. citizenship applications are also on the rise, and immigrants who are not citizens hold a homeownership rate of 39.3%, according to the latest data from the U.S. Census Bureau in its 2013 Current Population Survey. However, once these immigrants become citizens, that number nearly doubles to a homeownership rate of 69.7%.

And don’t forget first-time homebuyers. The most recent report from Ellie Mae shows where there is available inventory, Millennials are ready and willing to buy a home.

Overall, homeownership rates could boom over the next few years. That is, if struggling inventory levels can keep up.

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