August 25th, 2011 1:32 PM by Eileen Denhard
The Benefits of Vacation Homes Many of us have vacationed in a favorite locale and thought to ourselves, "I'd love to own a home here." This summer, it might be time to give that notion serious consideration. Several factors are currently in place which make owning a vacation home a viable opportunity and a worthwhile investment. Vacation homes are more affordable than they've been in recent years, presenting an opportunity to purchase a secondary residence that can save money, generate income and build equity in the long run. Not only will you always have a home waiting in your favorite vacation spot, you can also rent it out when you're not there. It also could eventually become your primary residence, perhaps allowing you a way to start preparing for retirement now. According to the National Association of REALTORS®, lower prices have opened up the door for more families to own vacation homes. The median price of a vacation home was $150,000 in 2010, an 11.2 percent drop from when the median price was $169,000 in 2009. As a comparison, the median price of a primary residence in 2010 was $176,700, 4.5 percent less than the $185,000 median in 2009. The housing market in general is favorable for qualified buyers at this point in time. Home prices are down an average of 27 percent from peak values five years ago. Even though second mortgages tend to have higher rates and shorter terms, interest rates as a whole remain near historical lows. If you're thinking of purchasing a vacation home, there's another reason to consider it now: Unless Congress acts soon, conforming loan limits are being reduced on October 1, decreasing the availability and affordability of mortgage credit for many buyers.