Vacation Home Demand Soars 77% In December 2021

Recent analysis from Redfin showed that while the 77% increase in vacation home demand was pretty high, it hung slightly below the 80% increase in Nov. 2021 and the record gain in Jan. 2021. It is, however, up from a 2021 low that was reached in Aug. 2021.

The company found that interest in second homes started to surge in mid-2020 as affluent Americans dispatched to vacation destinations, taking advantage of low mortgage rates and remote work. Redfin also attributed the slight slowdown in mortgage-rate locks from November to December as likely an effect of the holiday season and not indicative of dampening demand.

“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, according to the report. “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.”

According to rate-lock data from Optimal Blue, roughly 80% of mortgage-rate locks result in actual home purchases. With pandemic conditions seemingly surging across the U.S. and the rising demand in vacation homes, this may be good news for brokers looking to capitalize on these large-scale clients. This is especially true as a number of jumbo products are popping up across the industry.