Demand for Secondary Homes Far Out Stripes Demand for Primary Homes

Key Highlights

• Growth in demand for second homes spiked as pandemic took hold
• Research analysis by Redfin of rate-lock requests in mortgage application data from Optimal Blue substantiate surge in demand for second homes

Rate-Lock Requests via Mortgage Applications Indicate Explosion of Second Homes Purchases during Pandemic Year

Sales records do not indicate whether a home is purchased as a primary or secondary residence but requests for interest-rate locks on mortgage applications do

Redfin analyzed mortgage application data from Optimal Blue, a real estate analytics firm, to quantify demand for first- and second-homes.  Redfin zeroed in on interest-rate lock requests on those mortgage applications as rate-lock requests do indicate the specifics of a first- or secondary- residence.

Demand for Secondary Homes Predated Pandemic

Demand for secondary homes had begun pre-pandemic.  Rate-lock requests for second homes in January 2020 jumped to 51% over primary homes compared with just 33% the year before.

Pandemic Spurred Demand for Second Homes Over 2X

All that changed by September 2020 when rate-lock growth for secondary homes soared by +118% y/y.  Rate-lock growth for primary homes in September 2020, still formidable, came in at 65%.

Rate-Lock Requests on Mortgage Applications for Primary and Secondary Homes  2020

Secondary Homes       Primary Homes

January 2020                   51%                          33%

February                          57%                          39%

March                              25%                          41%

April                                -24%                        -9%

May                                 15%                          6%

June                                 110%                       56%

July                                  105%                       50%

August                              88%                         42%

September                        118%                        65%

October                            98%                          48%

November                         104%                        54%

December                          109%                       55%

January 2021                    84%                          36%

Thanks to Optimal Blue, Redfin and The New York Times.

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