Demand for second homes fell -21% y/y in July. This was the first time the demand for second homes was behind the demand for primary homes since April 2020.
Demand for Second Homes Losing Steam
After explosive activity in second-home purchases for the last 15 or 16 months, the demand for second and/or vacation homes plunged -21% y/y in July, according to a new report by Redfin.
Demand in second-home purchases began softening in June by -7% y/y but this -21% drop y/y is attention-getting.
Likewise, demand for primary home purchases also fell in July by -4% y/y.
It’s noteworthy that this July’s demand for second homes was substantially lower than that for primary homes…in fact, it’s been since April 2020 that we’ve seen second-home purchase demand take a back seat to primary homes.
Potential Factors Influencing Softening Demand
As of June 2021, home prices had soared to record-highs…+25%. Not only were potential buyers of second homes taken aback by such a huge price jump, prospective buyers of primary homes were also taken aback as well, just simply to a lesser extent.
Has Market for Second Homes Become Dry?
No, according to Taylor Marr, lead economist with Redfin. Marr said, “Demand for second homes remains well above pre-pandemic levels, and we can expect the high level of interest in vacation homes to persist in the new era of remote work…If you build it – amid an historic housing shortage – they will come. I expect vacation homes to remain popular as more homes are built.”
Thanks to Redfin
