Second Home Purchases Predicted to Increase

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A new housing market report produced by Fannie Mae has revealed that the majority of second home buyers are individuals over 45. As the population continues to age, the number of second home purchases is projected to increase. At the same time, more young people will find homeownership to be unaffordable for them.

Nearly 50 million US households are comprised of members who are older than 50. Out of this group, approximately 15% own a second home. This accounts for nearly 7 million households. With the aging of the population, this number will continue to increase at a faster rate than the actual share of second home owners in this group.

The Fannie Mae report reveals that the typical second home buyer is 47 years of age. The buyer comes from a household in which two people earn income. For comparison, the first-time home buyers are typically in their late 20’s or early 30’s and in many cases only one member of the household earns income.

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Around half of the second home buyers use a mortgage loan to finance their purchase. The share is not as high as with first home buyers primarily due to the age difference. Older individuals have more savings and physical assets, which can be liquidated. This enables them to put more money down on the property and in many cases to finance the whole purchase out of their pocket.

The market for second home mortgages has considerable differences on a state-to-state basis. The historic data shows that around a third of all second home loans are for the financing of properties located in the states of Florida, Arizona and California. The second home buyers generally prefer locations with warmer climates and this affects the mortgage market as well as the property market.

As the number of second home purchases will continue to increase in the coming years, the second home mortgage market will also experience a boom.

Mailynne

Mailynne

Mailynne serves as a content strategist and writer for mortgage.info. She is ahighly task-oriented strategic planner and experienced writer. Over the past 10 years, Mailynne has managedcontent for both large corporations, non-profits and businesses. She specializes in managing digital marketing,branding and web development content. Mailynne has worked with a variety of local, national and international organizations.

Contact: mailynne@mortgage.info
Mailynne

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