{"id":6444,"date":"2022-04-15T15:07:05","date_gmt":"2022-04-15T20:07:05","guid":{"rendered":"https:\/\/nwfl4sale.com\/demand-for-vacation-homes-slowing-report-says\/"},"modified":"2022-04-15T15:07:05","modified_gmt":"2022-04-15T20:07:05","slug":"demand-for-vacation-homes-slowing-report-says","status":"publish","type":"post","link":"https:\/\/nwfl4sale.com\/demand-for-vacation-homes-slowing-report-says\/","title":{"rendered":"Demand for Vacation Homes Slowing, Report Says"},"content":{"rendered":"
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Redfin: While demand for vacation homes dropped sharply for a 2nd consecutive month in March, such sales are still 13% higher than pre-pandemic levels.<\/span><\/span><\/span><\/p>\n<\/div>\n SEATTLE \u2013 Vacation homes became a hot commodity during the pandemic, but the trend is showing signs of waning. Higher mortgage rates and an increase in loan fees for second homes are prompting a slowdown in the sector, housing analysts report. Still, housing analysts predict second-home demand to remain above its pre-pandemic levels.<\/span><\/span><\/span><\/p>\n In March, demand for vacation homes dropped sharply for the second consecutive month, according to a new report from Redfin.<\/span><\/span><\/span><\/p>\n Despite the sharp drop, second-home sales are still up 13% compared to their pre-pandemic levels. Also, second homes are expected to remain above pre-pandemic levels due to the growth of remote work.<\/span><\/span><\/span><\/p>\n Nevertheless, housing analysts are paying attention to a trend of two months of consecutive declines.<\/span><\/span><\/span><\/p>\n \u201cThe pandemic-driven surge in sales of vacation homes is coming to an end as mortgage rates rise at their fastest pace in history, causing some second-home buyers to back off,\u201d says Taylor Marr, Redfin\u2019s deputy chief economist. \u201cWhen 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.\u201d<\/span><\/span><\/span><\/p>\n Also, a new second-home loan fee took effect on April 1, which could be hampering demand. The Federal Housing Finance Agency\u2019s fees for second-home loans increased between about 1% to 4%. That change could add about $13,500 to the cost of purchasing a $400,000 home for a second-home buyer.<\/span><\/span><\/span><\/p>\n Second-home demand exploded in mid-2020. More Americans were working remotely and mortgage rates had decreased to record lows. Rate locks for second homes reached a peak of 88% above pre-pandemic levels in March 2021.<\/span><\/span><\/span><\/p>\n Interest in second homes appears to remain high, but more buyers may be facing affordability challenges. The 30-year fixed-rate mortgage is heading to a 5% average, and rates below 3% have faded into the rearview mirror. Home prices also continue to rise while\u00a0housing inventory remains low. The number of listings in seasonal towns has reached record lows in recent weeks.<\/span><\/span><\/span><\/p>\n