Demand for second homes dropped 19.3% year over year in August, marking the third straight month of declines, according to a new report from Redfin. Demand for primary homes also fell, slipping 1% year over year in the second-consecutive month of declines.
While demand for second homes appears to have fallen significantly further year over year than demand for primary homes, that’s likely because there was a relatively large gain in demand for second homes a year ago.
Demand for vacation homes swelled during the coronavirus pandemic – surging as much as 172% in April – as many affluent Americans sought an escape from cramped city life amid stay-at-home restrictions. But as the overall housing market has started to cool, that insatiable demand has slowed.
While interest in second homes is lower than it was a year ago, it remains above pre-pandemic levels and will likely stay elevated as a result of the permanent shift to remote work for many Americans, according to Redfin Lead Economist Taylor Marr. Sales of vacation homes made up 6.7% of overall existing-home sales in the first four months of this year, up from 5% in 2019, according to a recent report from the National Association of Realtors.
“The pandemic isn’t over, but the desire to escape isn’t as intense as it was before. People are increasingly returning to life as normal, with kids going back to school and cities coming to life again,” says Marr. “The housing market as a whole is still booming, just not as strongly as it was in the second half of 2020. Homebuyer competition, migration and home-sales growth have all slowed.”
Read the full report here.