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Rising financial wealth drives increased demand for vacation homes in US

According to the National Association of Realtors' newly released 2019 US Vacation Home Counties Report, increased financial wealth and low mortgage rates have boosted the demand for and the prices of vacation homes in the country.

Between 2013 and 2018, the median sales price of a vacation home increased at a slightly faster pace of 36%, compared to 31% for the residential market overall.

Lawrence Yun, NAR's chief economist, says the present figures are telling, especially when compared to data from 10 years prior. “As of 2018, household net worth reached an all-time high of $100.3trn - that's nearly double from a decade ago when wealth declined during the recession. Some of this tremendous growth in wealth, although concentrated, increased demand for vacation homes.”

Although most homebuyers purchase their residence with the intent to use the property as a primary home, that is not the case for all buyers. In fact, a portion of homeowners purchase a second home expecting to use it as a general family vacation spot, as a tenant rental, a means to gain equity, or - upon retirement - a future primary residence.

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