Today's baby boomers are just
about as likely to unload a second home
as they are to buy one and they aren't
any more likely than their parents to
own additional properties. In the
greater scheme of the housing market,
those distinctions are probably more
significant than heralding baby boomers
merely as second home market boom
makers.
"Housing Trends Among Baby
Boomers," a new study of home owners 50
and older by the Mortgage Bankers
Association's finance research arm,
Research Institute for Housing America,
says the growth in the number of boomers
has been essential to growth in the
second home market, only because there
is a growing number of boomers, not
because boomers' appetites have
increased for second homes.
The real impact of baby boomers is
that they own homes at a higher rate
than other population groups, their
listings help keep the market supplied
with resales and those looking to move
down from empty nests or over to a
second home, are a key source of housing
demand.
Also, their home equity is the
most significant non-pension asset in
household portfolios and, as a large
reserve of untapped wealth, that bodes
well for both the housing market and the
ever-more housing dependent economy.
Tuning up some of the beliefs
about baby boomers and the second home
market, the study found:
Only 15 percent of homeowners 50 and
over also own a second home.
Despite anecdotal evidence, the rate
of second-home ownership among 50 to 60
year olds has remained flat over the
12-year period from 1992-2004. Early
Baby Boomers were no more likely to own
such homes than
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older cohorts.
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 six years.
Changes in marital status and health,
not income or employment, drive the
decision to dispose of a second home.
Second homes are a small portion of
the typical asset portfolio of an older
household and are not important drivers
of investment decisions.
Most second-home owners make limited
use of their homes: one-half spend two
weeks or less and two-thirds spend four
weeks or less per year in the home.
Also, only 12 percent of owners intend
to sell their main home and eventually
occupy their second home.
The market for mortgages on second
homes for older households is only 6.3
percent of the size of the market for
mortgages on primary residences.
Most baby boomer second-homes aren't
mortgaged. Owners either inherited their
homes or purchased them with cash.
Second-home mortgage originations
comprise only about four percent of
overall mortgage market originations.
There are strong regional patterns
of demand for second homes including
Florida, California, New England, and
other coastal regions, as well as the
West and mountain, lake and desert areas
throughout the nation.
Empty-nesters are not flocking to
urban areas. Only two percent of all
empty-nest retirement-age suburban
homeowners can be expected to move to an
urban area.
Suburban empty-nesters are just as
likely to move to a non-metropolitan
area as they are to an urban area.
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