Eight years after the housing crisis in 2008, Americans are finally bouncing back. It may seem like a long time coming, but it generally takes seven years for a homeowner’s credit reports to become free from the chains of foreclosure. Once a foreclosure is erased from one’s credit report, credit scores can finally begin to recover and applying for loans is an option once again. The last batch of those affected by the mortgage crisis is now reaching this milestone, and the future is finally looking brighter.
In case anyone has somehow forgotten just how serious the housing crisis was for Americans, there were 566,000 consumers whose brand new homes had been foreclosed on during 2009’s second quarter alone. Those 566,000 consumers are just a fraction of those who are finally approaching financial freedom — but what will that freedom mean for the economy?
According to Trulia Chief Economist Ralph McLaughlin, the improvement in credit scores might tempt Americans to begin borrowing more in general, not just for mortgages. As for the latter, the increase in borrowing is already documented. According to the U.S. Census, the rate of homeownership for consumers who were hurt the most in the housing crisis has risen over the past two quarters. McLaughlin told Bloomberg that this is the fist time that this has happened in the past two years.
That’s not to say everyone will be jumping at the chance to own a home again. More likely, the strengthening of the economy brought on by an influx of mended credit scores will be demonstrated over time. This is probably a good thing, considering foreclosure rates are still troubling in areas like South Florida. On the bright side, experts predict the improved scores, coupled with employment and compensation growth, is likely to increase consumer spending substantially.
The foreclosure crisis may be in the rearview mirror, but foreclosures still trouble many Americans every day — especially in South Florida. If you’re facing foreclosure, you need expert legal defense to see you through it. Contact our team at Graham Legal today.