TPH - Demand for vacation homes dips below pre-pandemic levels amid rising mortgage rates

In the wake of higher home prices, rising mortgage rates and looming recession risks, demand for vacation homes has fallen below pre-pandemic levels for the first time since 2020 (when interest rates were hovering around record lows), according to a report by real estate brokerage Redfin.  In May, mortgage-rate locks for second homes declined 4% from before the pandemic, down from a revised rate of 3% above pre-pandemic levels a month earlier and 70% above pre-pandemic levels Y/Y, according to Redfin. Another concern for second-home buyers is the federal governments' move in April to increase second-home loan fees, "adding roughly $13,500 to the cost of purchasing a $400,000 home," Redfin said.  Note that demand for vacation homes had peaked in March 2021, when it was nearly 90% above the pre-pandemic baseline.  “Skyrocketing monthly payments, along with higher loan fees, have priced many second-home buyers out of the market,” said Redfin Deputy

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Demand for vacation homes dips below pre-pandemic levels amid rising mortgage rates