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With summer almost over, you probably spent an amazing vacation at a beach resort, a mountain lodge, a lake, or in a quaint town and might be thinking of owning a vacation home. Or you might be a baby boomer planning to purchase a vacation home now to use as a primary residence during retirement. You might also want to purchase a vacation home to rent out or for equity gain.
Using U.S. Census Bureau data, Black Knight property records data, and the 2018 Home Mortgage Disclosure Act data, NAR identified vacation home counties, the least expensive and most expensive areas, and the income profile of buyers who can afford to purchase a vacation home in its 2019 Vacation Home Counties Report.
Top Vacation Home Counties
Using U.S. Census Bureau’s American Community Survey data, NAR classified “vacation home counties” as counties where the vacant housing for seasonal, recreational, or occasional use made up 20% or more of the county’s total housing stock.1 Of 3,141 counties, 206 counties (6.6%) were identified as vacation home counties.
The top 26 vacation home counties include those with nationally-known sites as well as local destinations. Though less populated, a surprisingly large number of counties along northern Michigan, Wisconsin, and Minnesota are in this mix: Massachusetts (Nantucket and Dukes (56%), Barnstable (41%)), New Jersey (Cape May; 51%); Colorado (Grand, Summit Eagle, Jackson, and Pitkin; 51%), Wisconsin (Vilas, Lincoln, Langlade, Forest, Oneida; 43%), Michigan (Roscommon, Ogemaw, Gladwin, Iosco, Arenac; 42%), Missouri (Camden, Miller, Pulaski, Morgan; 40%), Minnesota (Aitkin, Itasca, Cass; 38%).
Other vacation home counties are found in Maine, Pennsylvania, New York, New Hampshire, Maryland, Delaware, North Carolina, Vermont, Florida, California, Georgia, South Carolina, Arizona, Idaho, and Oregon.
Top 25 Least Expensive Vacation Home Counties
Using Black Knight property records data,2 the median sales price in 2018 in the least expensive vacation home counties was usually less than $100,000, with the most inexpensive vacation home counties found in Maine (Aroostook, Piscataquis, Somerset, Franklin, Oxford, Washington, Waldo), followed by New York (Chenango, Franklin), Pennsylvania (McKean, Venango, Clarion, Elk, Potter, Clearfield, Jefferson), Missouri (Miller), Michigan (Gogebic, Lake, Arenac, Iosco, Cheboygan), Wisconsin (Ashland), and Idaho (Boise, Clearwater).
The expected annual mortgage on a 20% down payment 30-year mortgage for a home purchased at the median sales price comes to less than $5,000. The mortgage payment would account for less than 10% of the income of a typical family ($33,000 to $52,000 in the top 25 least expensive vacation destination areas) if they were to purchase a vacation home. This means that owning a second home is affordable for families living in these areas.
Top 25 Most Expensive Vacation Home Counties
The most expensive vacation home counties included many well-known summer and winter getaways, with Nantucket, MA as the most expensive, vacation home county in 2018, with the median sales price at $1 million, followed by other counties in Massachusetts (Dukes which includes Martha’s Vineyard, Barnstable), Colorado (Pitkin, Eagle, Summit, Grand , Chaffee , Park, known for the Rocky Mountain summer and winter activities ), Florida (Monroe, which includes Florida Keys, Collier which includes Naples), California (Mono, Alpine, Inyo, Amador, Calaveras, Mariposa, which are all near Yosemite), Arizona (Coconino, which includes the Grand Canyon), New Jersey (Cape May, with Atlantic ocean front), Oregon (Clatsop, Columbia, Tillamook, which are near Seattle), South Carolina (Beaufort, with includes the Hilton Head Island ), Vermont (Windsor, for summer and winter recreation), and Delaware (Sussex, which encompasses the Rehoboth, Bethany, and Lewes beaches).
Based on the median sales price, the expected annual mortgage payment on a 20% down payment, 5% 30-year fixed mortgage rate based on the median sales price in 2018 ranged from $14,000 to $52,000. The mortgage payment would be 20% to 60% of the income of a typical family3 in these top 25 most expensive areas ($61,000 to $100,000), which is unaffordable to families only earning the median income.
Second Home Borrowers
Low mortgage rates made it more affordable for second home buyers who take out a mortgage. Among borrowers4 for second homes, the estimated mortgage payment to income ratio ranged from 4% to 12% in the vacation home counties. Most borrowers who obtained mortgages for second homes earned nearly or over $100,000.
Based on NAR’s tabulation of the 2018 Home Mortgage Disclosure Act, Cape May, New Jersey topped the list of vacation home counties where second home mortgages accounted for the largest share of home purchase loans. Other counties were California (Alpine, Mono); New York (Hamilton, Delaware), Maryland (Worcester), North Carolina (Avery, Watauga), Colorado (Grand, Summit), Wisconsin (Vilas, ,Burnett, Door, Oneida), Michigan (Lake, Roscommon, Iosco), Idaho (Idaho), Massachusetts (Nantucket, Dukes), New Hampshire (Carroll), Minnesota (Cass), Vermont (Windham), Florida (Monroe), Pennsylvania (Sullivan).
1NAR analysis of U.S. Census Bureau American Community Survey 2017 PUMS using Missouri Data Center allocation factors to allocate PUMA-level housing count data into county-level data.
2The data source in the estimation of the median sales price is Black Knight Public Record data, but all statistics and analysis are created by and should be attributed solely to NAR. NAR estimated median sales price using the Residential Indicator field (residential only) and not counting Quit claim deeds (Document Type field).
3The median family income is calculated based on 2013-2017 ACS PUMS data.
4NAR calculations based on 2018 Home Mortgage Disclosure Act data on second home loan originations.
