Home News Vacation-Home Demand Down to Pre-Pandemic Low

Vacation-Home Demand Down to Pre-Pandemic Low

by admin
0 comment

Holiday home buyers have been hit by economic changes and new rates, and current demand may have declined as a result of increased demand during the pandemic era.

Seattle-Villa demand fell below pre-pandemic baseline for the first time in two years, with second-house mortgage rates down 4% from pre-pandemic in May. report From Redfin. This is down from a correction rate of 3% above the pre-pandemic level a month ago and 70% above the pre-pandemic level a year ago.

Demand for vacation homes declined for a variety of reasons, including rising home prices, a rapid rise in mortgage rates to nearly 6%, and a slump in the stock market. This is the same factor that cools other housing markets.

However, there is one change that is specific to the purchaser of the second house. The federal government raised the second house loan fee in April, adding about $ 13,500 to the $ 400,000 home purchase cost.

Taylormer, Deputy Chief Economist at Redfin, said: “Many second-home buyers are also deterred by stock market turmoil, high inflation, and fears of recession, and because vacation homes aren’t as necessary as primary homes, accelerating withdrawal from the market. I can. “

The villa cooldown says, “It’s likely to continue as long as mortgage rates are rising and the stock market is sluggish.”

The decline in demand for villas shows a dramatic change compared to the peak of the pandemic from the second half of 2020 and 2021. From anywhere, thanks to work in remote areas and the desire of many to get out of a cramped city apartment.

Demand for villas peaked in March 2021 and was about 90% above pre-pandemic levels.

Interest in villas began to decline sharply in February of this year as mortgage rates began to rise. The average 30-year fixed mortgage rate for the week leading up to June 23 reached 5.81%.

© 2022 Florida Realtors®

You may also like