According to a new report from Redfin, the demand for vacation homes and investment properties was up 77% from pre-pandemic levels in December, slightly below the 80% increase in November, and the record high 92% gain in January, but up significantly from the significant 2021 drop in August.
“The wealthy are still flush with cash and have access to cheap debt, which is why second home purchases remain far above pre-pandemic levels,” said Redfin Chief Economist Daryl Fairweather.
Vast interest in second homes started to surge in mid-2020 as many affluent Americans traveled to vacation destinations, taking advantage of low mortgage rates and remote work. The minor slowdown in mortgage-rate locks from November to December is likely an effect of the holiday season rather than an overall decrease in demand.
Redfin’s report is based on an analysis of mortgage-rate lock data from real estate analytics firm Optimal Blue. Roughly 80% of mortgage-rate locks result in actual home purchases.
With an unpredictable housing market and the ongoing pandemic, vacation homes remain a highly-coveted sanctuary as many Americans are spending more time at home even if they're away on a holiday.
“While interest in second homes is stabilizing after the big boom in the second half of 2020 and the beginning of 2021, I expect demand to remain high well into this year. Remote work isn’t going anywhere and mortgage rates are still quite low,” said Fairweather.
Click here to view Redfin's December 2021 analysis of second homes.