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Vacation Home Purchases Slow Down
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According to real estate brokerage Redfin, the frenzy to snap up vacation homes may be slowing down.
The coronavirus pandemic saw an increase in people purchasing second homes, but demand has slowed down due to surging home prices and increased mortgage rates.
According to Yahoo! Money, analysis from Redfin showed demand for vacation homes tumbled for the second month in a row in March, with mortgage rate locks for second homes falling to their lowest level since March 2020.
“The pandemic-driven surge in sales of vacation homes is coming to an end as mortgage rates rise at their fastest pace in history, causing second-home buyers to back off,” Redfin Deputy Chief Economist Taylor Marr said in a statement reported by Yahoo! Money. “When rates and prices shoot up so much that a vacation home starts to look more like a burden than a good investment and a fun place to bring your family on the weekends, a lot of prospective buyers have second thoughts.”
Yahoo! Money reports surging home prices and increased mortgage rates are affecting the second home market and could also see a slowdown in the primary real estate market.
“We expect the combination of surging mortgage rates and record-high home prices to cause more homebuyers to drop out of the market,” Redfin chief economist Daryl Fairweather said.
