LendingTree Reveals the Cities with the Highest Share of Vacation, Investment and Second Homes

New LendingTree study ranks cities by non-owner occupied mortgage originations

CHARLOTTE, N.C., June 11, 2018 - LendingTree®, the nation’s leading online loan marketplace, today released its study on which cities have the highest share of vacation, investment and second homes.

The current housing market is characterized by low inventory for both new and existing homes. With current owners who are willing to sell in short supply, rising interest rates may further exacerbate this issue. Rising rates create a "lock-in" effect where current owners are dissuaded from selling and moving as their new home would come with a higher rate if financed. In the new market, homebuilders are facing rising prices for inputs and labor, which are eroding their profit margins. This is particularly acute for lower-priced homes that are not being build fast enough.

In this environment, every unit of inventory makes a difference for homebuyers. LendingTree’s study looks at the share of mortgages made for non-owner occupied properties to gauge their impact on inventory.

LendingTree analysts ranked the top 50 metros by the share of non-owner occupied loans based on the recently released HMDA data for 2017. Non-owner occupied properties are either vacation homes, investment properties or second homes. The study also looks at the average loan amounts for the two groups.  
 
Key findings from the study include:
  • There is a clear regional break. Cities with the most non-owner occupied properties were located in the South or the West while those with the least are in Northeast and Midwest.
  • Southern cities may be attracting investors due to low prices and growing populations. Many residents in Southern cities may not be able to access home ownership due to lower median salaries, creating a ready pool of renters.
  • In the West, the opportunity for rapid price appreciation is likely attracting investors. But high prices also suppress homeownership, creating a pool of renters.
  • In the Northeast and Midwest, affordable homes mean the opportunity to be a homeowner is high and less appreciation attracts less investors.
  • The homeownership rate in the top 10 cities is an average 59 percent compared with just 67 percent in the bottom 10. Even Detroit, a city often cited as having a challenging housing market, has a homeownership rate above all the top 10 cities.
 
Cities with most non-owner occupied mortgages

#1 Oklahoma City
  • Share of Non-Owner Occupied Mortgages: 15.4%
  • Non-Owner Occupied Average Loan Size: $193,000
  • Owner Occupied Average Loan Size: $182,000
#2 Philadelphia
  • Share of Non-Owner Occupied Mortgages: 14.6%
  • Non-Owner Occupied Average Loan Size: $245,000
  • Owner Occupied Average Loan Size: $225,000
#3 Memphis, Tenn.
  • Share of Non-Owner Occupied Mortgages: 14.6%
  • Non-Owner Occupied Average Loan Size: $126,000
  • Owner Occupied Average Loan Size: $192,000
 

 
 
Cities with the least non-owner occupied mortgages
 
#48 Hartford, Conn.
  • Share of Non-Owner Occupied Mortgages: 5.9%
  • Non-Owner Occupied Average Loan Size: $237,000
  • Owner Occupied Average Loan Size: $215,000
#49 Cleveland
  • Share of Non-Owner Occupied Mortgages: 5.7%
  • Non-Owner Occupied Average Loan Size: $124,000
  • Owner Occupied Average Loan Size: $167,000
#50 Detroit
  • Share of Non-Owner Occupied Mortgages: 5.2%
  • Non-Owner Occupied Average Loan Size: $115,000
  • Owner Occupied Average Loan Size: $163,000
 

 
 
To view the full report, visit: https://www.lendingtree.com/home/mortgage/cities-with-the-highest-share-of-vacation-investment-and-second-homes/.
 
Places ranked by share of non-owner occupied mortgages
Rank Metro Non Owner % Non-owner Average Loan Amount Owner  Average Loan Amount Non-Owner Average Applicant Income Owner  Average Applicant Income
1 Oklahoma City 15.4%  $193,000  $182,000  $86,000  $87,000
2 Philadelphia 14.6%  $245,000  $225,000  $116,000  $102,000
3 Memphis, Tenn. 14.6%  $126,000  $192,000  $128,000  $88,000
4 Miami 14.5%  $382,000  $302,000  $283,000  $119,000
5 San Francisco 13.9%  $695,000  $819,000  $326,000  $257,000
6 New Orleans 13.4%  $217,000  $219,000  $127,000  $98,000
7 Las Vegas 12.9%  $205,000  $258,000  $142,000  $91,000
8 New York 12.5%  $533,000  $423,000  $252,000  $163,000
9 Los Angeles 12.5%  $565,000  $501,000  $267,000  $163,000
10 Riverside, Calif. 12.2%  $280,000  $290,000  $185,000  $109,000
11 Orlando, Fla. 11.5%  $227,000  $230,000  $157,000  $91,000
12 Boston 11.4%  $560,000  $397,000  $189,000  $148,000
13 San Diego 11.2%  $444,000  $458,000  $227,000  $141,000
14 Sacramento, Calif. 10.9%  $310,000  $319,000  $217,000  $113,000
15 Austin, Texas 10.8%  $255,000  $279,000  $204,000  $326,000
16 San Jose, Calif. 10.4%  $569,000  $686,000  $288,000  $203,000
17 Phoenix 10.0%  $239,000  $245,000  $168,000  $91,000
18 Virginia Beach, Va. 10.0%  $205,000  $244,000  $123,000  $82,000
19 Nashville, Tenn. 9.8%  $246,000  $250,000  $164,000  $96,000
20 Kansas City, Mo. 9.5%  $192,000  $200,000  $116,000  $235,000
21 St., Louis 9.4%  $153,000  $193,000  $101,000  $127,000
22 Providence, R.I. 9.4%  $294,000  $243,000  $189,000  $96,000
23 Tampa, Fla. 9.4%  $200,000  $217,000  $152,000  $90,000
24 Seattle 9.1%  $402,000  $422,000  $189,000  $135,000
25 Jacksonville, Fla. 8.9%  $191,000  $221,000  $158,000  $88,000
26 Dallas 8.9%  $224,000  $269,000  $177,000  $121,000
27 Portland, Ore. 8.8%  $288,000  $306,000  $180,000  $ 106,000
28 Chicago 8.6%  $239,000  $266,000  $161,000  $121,000
29 Raleigh, N.C. 8.5%  $183,000  $251,000  $150,000  $103,000
30 Houston 8.5%  $230,000  $241,000  $155,000  $115,000
31 Denver 8.4%  $284,000  $316,000  $162,000  $106,000
32 San Antonio 8.4%  $180,000  $214,000  $140,000  $91,000
33 Milwaukee 8.0%  $258,000  $ 209,000  $115,000  $101,000
34 Charlotte, N.C. 8.0%  $178,000  $235,000  $145,000  $95,000
35 Atlanta 7.9%  $208,000  $235,000  $151,000  $97,000
36 Richmond, Va. 7.5%  $191,000  $236,000  $113,000  $91,000
37 Baltimore 7.3%  $224,000  $301,000  $170,000  $113,000
38 Washington 7.3%  $322,000  $406,000  $173,000  $139,000
39 Birmingham, Ala. 6.9%  $175,000  $196,000  $116,000  $86,000
40 Minneapolis 6.9%  $226,000  $241,000  $130,000  $102,000
41 Salt Lake, City 6.8%  $239,000  $266,000  $171,000  $89,000
42 Louisville, Ky. 6.5%  $230,000  $180,000  $108,000  $81,000
43 Columbus, Ohio 6.4%  $230,000  $199,000  $128,000  $95,000
44 Buffalo, N.Y. 6.4%  $294,000  $154,000  $127,000  $81,000
45 Pittsburgh 6.4%  $161,000  $177,000  $113,000  $93,000
46 Cincinnati 6.3%  $161,000  $183,000  $134,000  $91,000
47 Indianapolis 6.2%  $169,000  $185,000  $154,000  $92,000
48 Hartford, Conn. 5.9%  $237,000  $215,000  $142,000  $102,000
49 Cleveland 5.7%  $124,000  $167,000  $134,000  $92,000
50 Detroit 5.2%  $115,000  $163,000  $138,000  $83,000
 
 
 
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