Demand for vacation homes plummeted by 52% from pre-pandemic levels in March, according to new data from Redfin. In comparison, the demand for primary homes were down by only 13%.
Redfin noted that second-home rate locks were at their lowest level since 2016 in February and remained nearly as low in March – a far distance from when they peaked at 89% above pre-pandemic levels in August 2020 thanks to low mortgage rates and pandemic travel limits that encouraged remote work.
Now, however second-home buyers are faced with significantly higher mortgage rates, home prices that have yet to decline, an ongoing deficit of new listings and a wider economic uncertainty fueled by inflation. Complicating matters further is the end of pandemic restrictions and the growing demand by employers to have their employees in the workplace and not handling their tasks remotely.
“With housing payments near their all-time high; a lot of people can’t afford to buy one home right now, let alone a second,” said Redfin Deputy Chief Economist Taylor Marr. “Add the recent increase in loan fees, inflation, shaky financial markets, the end of pandemic-related financial stimulus and many companies calling workers back to the office, and it’s simply a challenging time for most Americans to buy a vacation home.”