Demand for second homes was up 70% from pre-pandemic levels in October, according to a new report from Redfin. This outpaced August’s 48% gain but was below January’s record 91% growth.
While demand for vacation homes is slightly lower since the beginning of the year, it is forecasted to remain above pre-pandemic levels as more Americans settle into work-from-home roles.
Home sales are on the rise as buyers are eager to lock in low mortgage rates on second homes before rates increase further.
“Many companies have solidified their remote-work policies, which is fueling continued demand for vacation homes,” said Daryl Fairweather, Redfin’s chief economist. “We expect this demand to stay strong as more employers establish permanent guidelines giving workers flexibility to live and work wherever they’d like.”
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, according to the report. 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, Fairweather added.