NEWS: Covid Driven Vacation Home Boom in America Now Ending in 2022

The post-covid trend of purchasing more vacation houses has finally started to decrease. According to numbers provided by RedFin, the second home boom has dropped for the second consecutive month. 

"The 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," said Redfin Deputy Chief Economist Taylor Marr. "When 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. The new second-home loan fees that kicked in on April 1 were also a deterrent. Plus, some buyers' down payments--and their nerves--probably took a hit when the stock market dipped over the last few months."

Although interest rates were already rising throughout mid 2020, the latest months of 2021 and beginning of 2022 drastic increase was a more determinant factor to slow things down.

Interest in vacation homes skyrocketed in mid-2020 as many affluent Americans started working remotely and mortgage rates dropped to record lows, with mortgage-rate locks for second homes reaching a peak of 88% above pre-pandemic levels in March 2021. Demand declined sharply over the last two months as mortgage rates shot up at their fastest pace in history, reaching 4.67% by the end of March, and some workers started returning to the office.