Second-Home Purchase Share
The share of home-purchase mortgages in a tract taken out on a property the borrower will use as a second residence.
The share of originated home-purchase mortgages in a tract where the borrower reported the property as a second residence.
Every application in the mortgage register carries an occupancy type. Regulation C requires lenders to report "whether the property ... is or will be used by the applicant or borrower as a principal residence, as a second residence, or as an investment property" (12 CFR 1003.4(a)(6)). This measure isolates the middle category among loans that were actually originated for a home purchase.
A second residence is distinct from an investment property. The borrower states that they will occupy the home for part of the year rather than rent it out as a business. In practice the distinction separates vacation and seasonal buying from landlord buying, and the two are tracked as separate measures here. Investor purchases are covered by their own family.
Second-home buying concentrates geographically. Coastal, mountain and lakefront tracts can show shares many times the national norm, while most tracts sit near zero. The measure is therefore highly skewed, and a place near zero is unremarkable rather than deficient.
Metrics in this family#
Considerations#
Occupancy is as reported at application, based on the borrower's stated intent. Later changes in how a property is used are not captured, and the register contains no mechanism for correcting a stated intent after the fact.
In tracts with few purchase originations the share is coarse. Where only a handful of loans were made, a single second-home purchase moves the share substantially.
The register covers institutions meeting the Regulation C reporting thresholds, currently 25 closed-end mortgage loans in each of the two preceding calendar years, or 200 open-end lines of credit (CFPB). Cash purchases are absent, which matters more here than elsewhere, since second homes are bought with cash more often than primary residences.
Later static releases of a given year incorporate resubmissions and late submissions (FFIEC), so recent years may still shift.
The public file is the modified register, redacted and altered by the Bureau to protect applicant and borrower privacy (CFPB).
References#
- 112 CFR 1003.4(a)(6)https://www.consumerfinance.gov/rules-policy/regulations/1003/4/
- 2CFPBhttps://www.consumerfinance.gov/about-us/blog/changes-to-hmda-closed-end-loan-reporting-threshold/
- 3FFIEChttps://ffiec.cfpb.gov/documentation/faq/static-dataset-faq
- 4CFPBhttps://www.consumerfinance.gov/data-research/hmda/