Mortgage Apps For Vacation Homes Spike 84 Percent In January 2021 YOY – NMP Skip to main content

Mortgage Apps For Vacation Homes Spike 84 Percent In January 2021 YOY

Navi Persaud
Feb 09, 2021
Photo of vacation homes in Florida.

Mortgage applications for second homes skyrocketed 84% year-over-year in January, according to a report from Redfin. The jump marks the eighth straight month of 80%-plus year-over-year growth. Despite being a substantial increase the report notes that it is down from the peak 118% year-over-year increase in September 2020.
 

The increase in second-home applications year-over-year is more than twice the increase in applications for primary homes, which is based on the analysis of mortgage-rate lock data from Optimal Blue. As the COVID-19 pandemic continues to convert many companies to a remote workforce, more folks are looking to less densely packed cities and decamping to vacation destinations. Redfin also states that the increase in demand for second homes is indicative of a K-shaped economic recovery from the pandemic-driven recession.

"Although demand is down slightly from the fall peak, the fact that nearly twice as many second-home buyers submitted applications in January as the year before means the popularity of vacation towns is not a fad," said Redfin economist Taylor Marr. "Many Americans have realized remote work is here to stay, allowing some fortunate people to work from a lakefront cabin or ski condo indefinitely. But while many well-off remote workers are able to follow their dreams and purchase second homes, it has become even more difficult for many lower-income people to buy a primary residence as home values rise and the recession disproportionately impacts employees in the service sector."

Meanwhile, Redfin also reported that home prices in seasonal towns are up 19% year-over-year in December 2020. Low mortgage rates are responsible for keeping overall homebuying demand up over the past couple of months, with total home sales up 16% year-over-year as of December.

Click here to read more from the report.

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