Survey: Bank Foreclosure Homes a Hit to Bargain Hunters

by Peter Vernon on Foreclosure Crisis

A homeownership survey showed that home buyers are motivated to buy bank foreclosure homes because of low interest rates and property prices. The survey indicated that 65.2 percent of potential homebuyers are driven by affordability to hunt for bargain-priced foreclosure properties.

About 19.6 percent or one out of five potential buyers stated that low-priced bank foreclosure homes in their neighborhoods would entice them to buy a home, adding that affordability will remain the major reason that will keep their interest to buy foreclosure properties in the future.

Meanwhile, 15.5 percent of buyers said that they are motivated to make an acquisition soon because home prices are as low as they could go. And still, 15.5 percent of potential buyers said that they will decide to buy foreclosure properties before interest rates increase.

On the other hand, for first-time homebuyers, the $8,000 federal tax credit is the major reason that they will buy bank foreclosure homes. The survey also noted that there is lack of awareness among majority of Americans of the extent of affordability of properties in the current housing market.

About 76.4 percent of consumers thought that a family earning a median income could afford only half or less of the properties sold in their area. But the current market allows a family earning $53,182, which is the national median income, to buy 75 percent of properties for sale.

The National Association of Realtors’ Housing Affordability Index has an overall increase of 29 percent and 19 percent for novice homebuyers. The Affordability Index is at its peak in its 28 year history.

According to real estate experts, value is the greatest motivator for most potential homebuyers. They added that the quality and variety of properties currently available to average American families are much greater that what they realize. They believed that boosting consumer confidence and providing credit to responsible borrowers would greatly help in restoring the housing market’s vitality.

On the other hand, the survey noted that the Making Homes Affordable program of the Obama Administration is not popular with most respondents. Forty-one percent of survey respondents believed that the program designed to trim down the number of bank foreclosure homes is not working as expected. Only 27.8 percent of respondents believed that the program is helping abate the foreclosure crisis.