According to national property broker Redfin, demand for second homes in the U.S. was up 70% from pre-pandemic levels in October 2021. This outpaced August's 48% gain but below January's record 91% growth.
A mortgage-rate lock is an agreement between a homebuyer and a lender that allows the homebuyer to lock in an interest rate on a mortgage for a certain period of time, offering protection against future interest-rate hikes. Homebuyers must specify whether they are applying to secure a mortgage rate for a primary home, a second home or an investment property. Roughly 80% of mortgage-rate locks result in actual home purchases.
Home sales are on the rise during a time of year when the housing market typically slows down, with many buyers eager to lock in low mortgage rates on second homes before rates increase further.
"Many companies have solidified their remote-work policies, which is fueling continued demand for vacation homes," said Redfin Chief Economist Daryl Fairweather. "We expect this demand to stay strong as more employers establish permanent guidelines giving workers flexibility to live and work wherever they'd like."
In March, a restriction enacted by the Treasury Department and Federal Housing Finance Agency limited the number of second-home and investment property loans Fannie Mae could purchase. That restriction was removed in September, making it easier for second-home purchasers to get a low mortgage rate, which is likely also fueling demand for second homes, Fairweather added.