This new surge of buyers could drive the growth of the housing market forward, according to experts.
Although insufficient credit and financial difficulties still deem many Americans unsuitable candidates for a mortgage, it is predicted that the number of eligible households will increase to nearly two million by the close of 2014.
"This could be a significant source of housing demand going forward," said Mark Zandi, chief economist for Moody's Analytics Inc in Westchester, Pennsylvania. He added: "Lots of people lost jobs through no fault of their own. They will be good credit risks in a reasonably good economy. It was not their willingness that was the problem, but their broad ability to pay."
Joanne Gaskin is the product management director for scores at FICO, where access to credit is dependent on a scale of 300-850. She explained that more mortgage borrowers have scores of 800 or over than they did two years ago, and the number of borrowers with scores falling between the 560-660 range is also rising. The median score also increased from 711 in October 2011 to 714 last year.
Over time, the number of buyers able to access credit will continue to rise as the economy and employment levels stabilize. More buyers will see the competition for homes driven up and consequently house prices will also increase. These rising values will enable homeowners to regain equity; according to the Mortgage Bankers Association, over 1.7 million homeowners saw a return to positive equity in 2012.
As the position of buyers is predicted to strengthen, the American real estate market growth is set to roll out across the nation.
