In May, demand for second/vacation homes fell below pre-pandemic levels for the first time in two years.

Cooldown of Vacation-Home Boom

Demand for vacation homes is on the downward slope.  May’s mortgage-rate locks for second homes dropped -4% y/y from pre-pandemic times, according to Redfin.  This was the first time second-home demand fell below its pre-pandemic baseline in two years.  One year ago, second-home demand was up +70% compared to January-February 2020.

The main causes of this about-face in vacation homes include high home prices, climbing mortgage rates, a volatile stock market and the government’s increase in second-home loan fees in April.


Please choose one answer:

1) I am ready to join EXP Realty. 

2) I am interested in EXP Realty and need more info. 

3) I am not interested in EXP Realty. 


* If you answered “#1” congratulations. You are about to join the fastest-growing real estate company in the world. Tim and Julie Harris are inviting you to join them at EXP Realty. Text Tim directly for the next steps: 512-758-0206. (text only please)

* If you answered “#2” please watch the videos and check out the other intel on this site. . 

* If you answered ‘#3’ no worries. You will want to check out so you can at least know what EXP Realty is and why so many agents are moving to EXP. 

According to the FHFA, (Federal Housing Finance Agency) upfront second-home fees increased between 1.125% – 3.875%, tiered by loan-to-value ratio.  This translates into adding approximately $13,500 to the cost of buying a home priced at $400,000.

Many Second Home Buyers “Priced Out of Market”

“Skyrocketing monthly payments, along with higher loan fees, have priced many second-home buyers out of the market,” said Redfin Deputy Chief Economist Taylor Marr.  “Many would-be second-home buyers are also deterred by turmoil in the stock market, high inflation and recession fears, and they can be quicker to pull back from the market because vacation homes aren’t a necessity the way primary homes are.  The cooldown in the second-home market is likely to continue as long as mortgage rates are elevated and the stock market is slumping.”

Tipping Point in Q1 2021

Demand for second homes soared from Q3 2020 through Q1 2021 due to historically low interest rates and remote working options that untethered thousands of people from fixed locations so they could work wherever they wanted.  At its peak in March 2021, demand for second homes was approximately 90% above pre-pandemic levels.

Mortgage-rate locks for second homes began declining in February 2022 when buyers sniffed mortgage rate hikes.  The kicker was the FHFA’s increase of mortgage fees to second home loans in April.

No more “sniffing” required.  The average 30-year sixed mortgage hit 5.78% during the week ending June 16.

URGENT! Exclusive Invite: Join Premier Coaching for FREE! You read that correctly, Premier Coaching for the first 30 days is 100%, no strings attached FREE. Here is what you get: DISC Personality Test, Seller and Buyer Scripts, Presentations, Lead Generation Systems, Market Shift Plan, Real Estate Treasure Map, Members Only Community Groups (and a ton more). The best part is you will have a DAILY Live Coaching Call with a Harris Certified Coach. Yep, you read that correctly….every weekday you will attend a semi-private coaching session with your coach. All of this is 100% FREE. Of course, you want to join Premier Coaching. There is Zero Risk and joining costs you nothing. This is the Real Estate Success system you need in this quickly changing market. Join Premier Coaching NOW.

Thanks to Redfin.

Claim Your FREE Real Estate Treasure Map!