A flood of ex-homeowners may be ready to re-enter the mortgage market over the next five years, according to a TransUnion report.
Based on an analysis of the credit scores of about 180 million consumers, TransUnion estimated that so-called "boomerang" borrowers could obtain a residential mortgage by 2020.
TransUnion defined "boomerang" borrowers as consumers who were hurt during the financial crisis: they were at least 60 days late on a mortgage; they lost a home through foreclosure or short sale; or they were involved in a mortgage modification.
The housing market could see the influx of new buyers because it's been more than seven years since the beginning of the mortgage crisis, said Joe Mellman head of TransUnion's mortgage group. That's enough time for certain negative factors to expire on an individual's credit history.
"As consumers responsibly manage their credit and pass these milestones, we anticipate a tide of newly mortgage-eligible consumers entering the market," Mellman said in a news release.
The "boomerang" borrowers will re-enter the market in phases, TransUnion estimated. About 700,000 consumers could re-enter the housing market this year. A total of 1.5 million may re-enter the market by 2018.
TransUnion analyzed the "depersonalized" credit history of 180 million consumers with credit histories, between 2006 and 2014. (Depersonalized means that the credit data is stripped of personally identifiable information.)
