Joe and Tonya Wyatt built their dream home in 2004, shortly before the devastating onset of the Great Recession. When fallout from the financial crisis eventually forced them into bankruptcy, they lost their house and their dream appeared to be over.
But through that adversity, they persevered, rebuilt their financial lives, and became “comeback homeowners” earlier this year. Today, normalcy has returned: They landscape the yard, save for a kitchen remodeling project, and plan for their children’s college education. Their dream has found a second act, they say.
“We went through some tough times, came together as a family, and have come out on the other side OK,” said Joe Wyatt, a former home builder in Atlanta and now a global program manager for aviation security at UPS. “It was a very trying time in our lives. When you get to a point when everything collapses, then you start soul-searching, job-searching, and finding the strength you need to keep going.”
The Wyatts are among a number of homeowners who are beginning to return to the market after recovering from the financial crisis of nearly a decade ago. Nearly 2.7 million potential “boomerang buyers” could return to the market through the end of 2017 as their damaged credit recovers from recession-related foreclosures and bankruptcies, according to data from RealtyTrac.
Many of them are now house hunting again, said Lisa Jeffers Letchworth, a Wells Fargo home mortgage consultant in Atlanta, who worked with the Wyatts on their most recent mortgage application and approval.
“I’ve definitely seen a lot of boomerang buyers — as well as millennials — who want to buy a home these days,” she said. “The boomerang buyers are more enthusiastic about getting back into homeownership, while the millennials tend to be a bit more conservative.”
Boomerang buyers may be having more of an impact in Atlanta than any other U.S. market, RealtyTrac says. Figures show owner-occupied home purchases rose in 2016 as sales to non-occupant investors fell 11.6 percent — the biggest drop in the U.S.
With investors still making up a disproportionate share of purchases nationwide, the boomerang buyer effect seems to currently be limited to certain metro areas, said Daren Blomquist, senior vice president of AttomTM Data Solutions, the parent of RealtyTrac. Overall, Atlanta ranks fifth in the U.S. with more than 280,000 potential boomerang buyers that could re-enter the market from 2015 to 2022.
“Atlanta is at the top of the list with the biggest decrease in the share of investor purchases, which indicates that boomerang buyers and other owner-occupant buyers are gaining traction in some cities, counter to the national trend,” Blomquist said.
Finding a way back home
For the Wyatts to buy a home for the second time, Joe Wyatt said it took Jeffers Letchworth’s attentive guidance and her help in re-establishing their credit and finding the right mortgage for their situation. She introduced them to Wells Fargo’s yourFirst MortgageSM, which offers simple guidelines, conventional fixed rates, flexible credit, and down payments as low as three percent to any eligible homebuyer, including those who are buying for the first time or returning to the market.
“It was just the right fit for them,” Jeffers Letchworth said.
Since yourFirst Mortgage launched in May 2016, the company has funded 35,453 loans at a cumulative value of nearly $7.8 billion, according to Wells Fargo Home Lending’s latest data.
“This type of low down payment loan meets a major need in the marketplace, from those who are returning to homeownership after the hardship of the financial crisis to those who are trying to buy for the very first time,” said Brad Blackwell, head of Home Lending’s housing policy and homeownership growth strategies. “It can bring families back to their first love of owning a home and introduce newcomers to the opportunity of a lifetime.”
In recent years, the economic benefits of homeownership for families have come into clear focus as rental rates have skyrocketed, said Lynn Fisher, vice president of research and economics for the Mortgage Bankers Association.
“One key benefit for households who are ready to settle down is that homeownership can help insulate them from rental market shocks,” Fisher said. “Becoming a homeowner, especially if financed with a 30-year fixed-rate mortgage with a sustainable fixed payment, can provide certainty over future housing costs.”
She noted that families also see many emotional, psychological, societal, and communal benefits from homeownership and its “social investments.”
Such factors were highlighted in a recent Wells Fargo Stories online poll, in which respondents were asked what they valued most about their home.
The top response: “The stability it brings to my family.”
It’s a response that resonates with Joe Wyatt.
“That is the most important thing for us — to have that stability again,” he said. “Not to be moving around and renting all the time. Not to be pulling the children out of school and disrupting their lives. All of that is past now. It’s a feeling that we’re home again.”