Demand for vacation homes jumped in
There are several reasons for the cooling in second-home demand this spring. High prices are likely playing a role, as is the reopening of offices. The typical spring slowdown in overall pending home sales is also impacting vacation-home sales. Plus, many people with the desire and means to buy a vacation home this year have already done so throughout the pandemic.
Additionally, mortgage-lending rules for second homes tightened in April and May. Under new federal rules, second-home and investment property mortgages can make up just 7% of a lender's total pipeline. That's on top of regulations that make it difficult to get a loan for condo towers in resort areas that may be used as short-term rentals.
"In addition to tighter lending rules, vacation-home buyers are starting to react to rising prices," said Redfin Chief Economist
"A lot of the people who were driven to hunt for vacation homes over the last year have already bought them," Fairweather continued. "The pandemic and remote work drove many affluent Americans to relocate to vacation destinations, at least part of the time. But with offices reopening and life returning to some semblance of normal, people are less focused on fleeing to the beach or the lake."
To view the full report, including charts and methodology, please visit: https://www.redfin.com/news/second-home-demand-drops-pre-pandemic-levels
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