Second-Home Demand Rose 70% From Pre-Pandemic Levels in October

Rhea-AI Summary

Redfin reports a 70% increase in demand for second homes in October compared to pre-pandemic levels, surpassing August's 48% rise but falling below January's 91% peak. The ongoing demand is attributed to companies solidifying remote work policies, encouraging buyers to secure low mortgage rates. The removal of restrictions on second-home loans by the Treasury Department in September further fuels this trend. Approximately 80% of mortgage-rate locks lead to home purchases, indicating strong market activity.

Positive

• 70% increase in second home demand in October compared to pre-pandemic levels.
• Demand surpasses August's 48% but is below January's record 91%.
• Strong demand driven by solidified remote work policies.

Negative

• None.

SEATTLE, Nov. 17, 2021 /PRNewswire/ -- (NASDAQ: RDFN) —Demand for second homes was up 70% from pre-pandemic levels in October, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. This outpaced August's 48% gain but below January's record 91% growth.

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.

Home sales are on the rise during a time of year when the housing market typically slows down, with many buyers 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 Redfin Chief Economist Daryl Fairweather. "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. 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.

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

 

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SOURCE Redfin

FAQ

What was the increase in second home demand reported by Redfin?

Redfin reported a 70% increase in demand for second homes in October compared to pre-pandemic levels.

How does October's second home demand compare to previous months?

October's second home demand increase of 70% surpasses August's 48% but falls below January's record growth of 91%.

What factors are driving the demand for vacation homes?

The demand for vacation homes is driven by solidified remote work policies and the removal of restrictions on second-home loans.

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

Approximately 80% of mortgage-rate locks result in actual home purchases.