Mortgage-rate locks for second homes plummeted by 13.1% year-over-year in August to the lowest level since March 2016 on a seasonally adjusted basis, according to new data by Redfin (NASDAQ: RDFN). In comparison, mortgage-rate locks for primary homes declined 5.2%.
Rate locks for second homes were down 59.2% from pre-pandemic levels, compared with a 31.9% drop in rate locks for primary homes. Mortgage-rate locks for second homes hit a record of 96.2% above pre-pandemic levels in October 2020 when low mortgage rates and Covid-era work-from-home policies allowed many Americans to acquire properties in vacation towns.
Redfin attributed the steep decline to factors including elevated mortgage rates, higher prices on second homes and a Biden-Harris administration hike on loan fees for second homes in 2022.
“Most of the homes that are sitting on the market right now are second homes – especially those in the $400,000 to $800,00 price range, which tend to be more stagnant,” said Shay Stein, a Redfin Premier real estate agent in Las Vegas.
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