Second-Home Demand Climbs 70 Percent From Pre-Pandemic Levels

While first-time homebuyers are still trying to find the perfect home for the right price, a large number of folks are already looking for house number two as second-home demand sees a hefty increase in October.

The report added that despite the demand for vacation homes cooling down in comparison to January's 91% increase in second-home demand, it is still expected to remain above pre-pandemic levels with more companies allowing the flexibility of remote work.

Redfin reports that 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. Roughly 80% of mortgage-rate locks result in actual home purchases.

“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.”

According to the report, 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, added Fairweather.