Demand for Vacation Homes Up 77% From Pre-Pandemic in December

Rhea-AI Summary

Demand for vacation homes surged 77% year-over-year, significantly surpassing pre-pandemic levels, according to a report from Redfin.

Despite a slight decrease from an 80% increase in November, December's numbers indicate a stable interest among affluent buyers due to low mortgage rates and remote work options. Redfin's Chief Economist Daryl Fairweather emphasized that wealthy buyers continue to leverage cheap debt, suggesting ongoing high demand into 2022. The report is based on mortgage-rate lock data, highlighting that 80% convert into actual purchases.

Positive

• 77% increase in vacation home demand from pre-pandemic levels.
• Continued access to low mortgage rates enabling affluent buyers.
• Predicted sustained high demand for second homes well into 2022.

Negative

• None.

While demand for second homes fell just slightly last month, affluent buyers continued to take advantage of remote work and low mortgage rates

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) —Demand for vacation homes was up 77% from pre-pandemic levels in December, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. This is slightly below the 80% increase in November and the record 92% gain in January, but up significantly from the 2021 low hit in August.

Interest in second homes started to surge in mid-2020 as affluent Americans dispatched to vacation destinations, taking advantage of low mortgage rates and remote work. The slight slowdown in mortgage-rate locks from November to December is likely an effect of the holiday season and not indicative of dampening demand.

“The wealthy are still flush with cash and have access to cheap debt, which is why second home purchases remain far above pre-pandemic levels,” said Redfin Chief Economist Daryl Fairweather. “While interest in second homes is stabilizing after the big boom in the second half of 2020 and the beginning of 2021, I expect demand to remain high well into this year. Remote work isn’t going anywhere and mortgage rates are still quite low.”

Redfin’s report is based on an analysis of mortgage-rate lock data from real estate analytics firm Optimal Blue. A mortgage-rate lock is an agreement between a homebuyer and a lender that allows the homebuyer to lock in an interest rate on a mortgage for a certain period of time, offering protection against future interest-rate hikes. Homebuyers must specify whether they are applying to secure a mortgage rate for a primary home, a second home or an investment property. Roughly 80% of mortgage-rate locks result in actual home purchases.

To view the full report, including charts and methodology, please visit: https://www.redfin.com/news/vacation-homes-december-2021

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, instant home-buying (iBuying), rentals, lending, title insurance, and renovations services. We sell homes for more money and charge half the fee. We also run the country's #1 real-estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can take an instant cash offer from Redfin or have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 6,000 people.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220106005295/en/

Redfin Journalist Services:

Ally Braun, 206-588-6863

press@redfin.com

Source: Redfin

FAQ

What is the current demand trend for vacation homes according to RDFN?

The demand for vacation homes has increased by 77% compared to pre-pandemic levels, as reported by RDFN.

How did December 2021 vacation home demand compare to previous months?

December 2021 saw a 77% increase in vacation home demand, slightly down from 80% in November and a record 92% in January.

What factors are contributing to the high demand for second homes?

The high demand is driven by low mortgage rates and the ability for affluent buyers to work remotely.

What percentage of mortgage-rate locks result in actual home purchases?

Approximately 80% of mortgage-rate locks convert into actual home purchases.

Who provided the analysis for the vacation home demand report?

The analysis was provided by Redfin, utilizing mortgage-rate lock data from Optimal Blue.