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Demand for primary homes also dipped 1% in August

Demand for second homes dwindled for the third consecutive month, according to Redfin.

In August, demand dipped 19.3% compared to the same time a year ago, the technology-powered real estate brokerage reported. At the same time, demand for primary homes also dipped 1% compared to a year ago, which marked the second straight month of declines for such homes.

The demand for second homes has fallen significantly when compared to primary homes mainly due to the fact that there was a “relatively large gain in demand” for vacation or second homes a year ago, according to Redfin.

“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,” Redfin said.

However, the “insatiable demand” for such homes has slowed as the overall housing market starts to cool – especially now that kids are heading back to school.

“The pandemic isn’t over, but the desire to escape isn’t as intense as it was before,” said Redfin lead economist Taylor Marr. “People are increasingly returning to life as normal, with kids going back to school and cities coming to life again.”

The housing market is still “booming” but it’s not as strong as it was in the latter half of 2020. Homebuyer competition, migration and home-sales growth have all slowed, according to Marr.

Still, interest in second homes is above pre-pandemic levels and is projected to stay elevated because many Americans will be working remotely for the foreseeable future, according to Marr.

During the first four months of the year, second home or vacation home sales accounted for 6.7% of overall existing-home sales. This is up from 5% in 2019, according to Redfin, which cited a recent report from the National Association of Realtors.

Original Article – Fox Business

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