Redfin: Demand for Second-Home Mortgages Lowest Since 2016

(Image courtesy of Redfin; Breakout image courtesy of João Vítor Heinrichs/pexels.com)

Redfin, Seattle, reported mortgage rate locks for second homes fell 13.1% year-over-year in August, to hit the lowest level since March 2016 on a seasonally adjusted basis.

Mortgage locks for primary homes did decline, but by only 5.2%.

Compared with pre-pandemic levels, rate locks for second homes are down 59.2%, compared with 31.9% for primary residences.

“Most of the homes that are sitting on the market right now are second homes–especially those in the $400,000 to $800,000 price range, which tend to be more stagnant,” said Shay Stein, a Redfin Premier Real Estate Agent in Las Vegas.

Redfin posited a few reasons that second-home demand may be so sluggish–including that second-home buyers may be more likely to pay cash instead of seeking a mortgage.

Second homes aren’t a necessity, so when housing costs rise, second-home buyers may back off. In general, “economic jitters” may be depressing the specific market.

Return-to-office continues to affect many people’s schedules, so the types of workers that sought out vacation homes during the pandemic may no longer be able to justify a second residence.

And, asking rents for services such as Airbnb or other short-term rentals have stagnated, so second homes may not be viewed as a good investment right now.

Redfin used rate lock data from Optimal Blue, Plano, Texas, for the analysis, along with other information.