Housing Trends Among Baby Boomers Study - Impact on Second Home Market
The Research Institute for Housing America in conjunction with the Mortgage Banker’s Association and Radian mortgage insurance completed a study of housing trends among baby boomers. The focus of the study was in two key areas.
1) What are the trends of second home ownership among baby boomers
2) Are suburban empty-nesters flocking to urban areas
This article focuses on the findings related to the first question, what are the trends of second home ownership among this age group. The findings may not be what you think…
Trends of Second Home Ownership Among Baby Boomers
Recently articles and industry projections theorize that the baby boomer generation is more likely to own second homes than their parents generation. As a result, land speculation and development geared towards vacation areas like Palm Springs is increasing.
This statement appeared in the Real Estate Journal on-line, “The baby- boom generation continues to amass both inherited and earned wealth. And many a boomer will buy a second home with an eye to eventually retiring to it.”
But the study conducted by the Research Institute for Housing America says otherwise: “Despite anecdotal evidence, the rate of second-home ownership among 50-60 year olds (the peak demanders for these properties among older households) has remained flat over the 12-year period from 1992 to 2004. The early baby-boomers were no more likely to own such homes than older cohorts of homeowners.”
Here is a bullet point list of the findings:
* Most second-home owners either inherited their homes or purchased them with cash. Second home mortgage originations comprised only about 4 percent of overall mortgage market originations.
* There are strong regional patterns of demand for second-homes, and second-home mortgage activity is heavily geographically concentrated.
* The typical second home is held for about 15 years, but turnover is high: 45 percent of older homeowners with such homes disposed of them within a six year window. Changes in marital status and health, not income or employment, drive the decision to dispose of a second home and, hence, pre-pay a second home mortgage.
* Only 12 percent of owners intend to sell their main home and eventually occupy their second home.
For complete review of the study and it’s findings, methodolgy and statistics, click here.