Redfin reports that in September the demand for second homes was 60% higher than before the coronavirus pandemic, according to an analysis mortgage rate foreclosure data from the real estate analysis company Optimal blue.
The popularity of vacation homes skyrocketed at the start of the coronavirus pandemic, with many Americans choosing to give up city life and work remotely. But, the surge in demand for second homes has started to ease as cities lifted stay-at-home restrictions, the initial shock of the pandemic has worn off, the home buying season comes in the spring. ended, the rollout of immunization increased and the overall housing market began to cool.
Redfin Deputy Chief Economist Taylor marr noted that a Fannie Mae’s new rule contributed to the slowdown in demand for vacation homes, as plans were announced in March to limit the number of secondary and investment home loans he would buy, making it more difficult and costly for some buyers to take out mortgages on vacation homes.
Redfin recently reported that request for holiday homes in August fell 19.3% year-on-year, marking the third consecutive month of decline, while demand for primary housing fell 1%, its second month of decline. According to Redfin Data reporter Lily Katz, just because the numbers are dropping year over year, it’s important to note that demand for second homes soared 172% during the pandemic and peaked in April. . But as the market begins to seasonally cool, demand for primary and secondary homes has started to slow.
“The market may have overreacted a bit to the Fannie Mae rule, which would explain why we’ve seen second home demand rebound,” Marr said. “Mortgage rates are on the rise also, which likely creates a renewed sense of urgency for vacation home buyers who wish to purchase properties before rates rise even further. “
The Treasury Department and the Federal Housing Finance Agency (FHFA) recently announced that they would remove restrictions previously placed on Fannie Mae in an attempt to boost housing supply. This will likely help keep demand for second homes above pre-pandemic levels for the foreseeable future.
Click here for more information on Redfin’s second home analysis.