Second-Home Demand Rose 70% From Pre-Pandemic Levels in October
While demand for vacation homes has cooled slightly since the start of the year, it's expected to remain above pre-pandemic levels as many Americans take advantage of more permanent remote-work policies
SEATTLE, Nov. 17, 2021 /PRNewswire/ -- (NASDAQ: RDFN) —Demand for second homes was up 70% from pre-pandemic levels in October, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. This outpaced August's 48% gain but below January's record 91% growth.
A mortgage-rate lock is an agreement between a homebuyer and a lender that allows the homebuyer to lock in an interest rate on a mortgage for a certain period of time, offering protection against future interest-rate hikes. Homebuyers must specify whether they are applying to secure a mortgage rate for a primary home, a second home or an investment property. Roughly 80% of mortgage-rate locks result in actual home purchases.
Home sales are on the rise during a time of year when the housing market typically slows down, with many buyers eager to lock in low mortgage rates on second homes before rates increase further.
"Many companies have solidified their remote-work policies, which is fueling continued demand for vacation homes," said Redfin Chief Economist Daryl Fairweather. "We expect this demand to stay strong as more employers establish permanent guidelines giving workers flexibility to live and work wherever they'd like."
In March, a restriction enacted by the Treasury Department and Federal Housing Finance Agency limited the number of second-home and investment property loans Fannie Mae could purchase. That restriction was removed in September, making it easier for second-home purchasers to get a low mortgage rate, which is likely also fueling demand for second homes, Fairweather added.
About Redfin Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, instant home-buying (iBuying), rentals, lending, title insurance, and renovations services. We sell homes for more money and charge half the fee. We also run the country's #1 real-estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can take an instant cash offer from Redfin or have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 6,000 people.
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