October 4, 2023
Vacation Home Demand Declining
The demand for vacation homes has dropped by around 30% from pre-pandemic levels, and many people are not actively searching for them as before.
With the rising cost of living, owning a second property has become unaffordable for many. The increasing costs of goods and services, coupled with economic uncertainty, are contributing factors.
However, this is not the only reason. Mortgage rate locks also play a significant role. A mortgage rate lock guarantees that your interest rate will not change between the offer and closing, as long as you close within the specified time frame and there are no changes to your application. As of August, mortgage rates reached a two-decade high.
Most second homes have higher mortgage rates, making it difficult for people to afford them. Many individuals have resorted to renting them out short-term to generate extra income. Unfortunately, with new rental regulations and the introduction of new taxes, it hasn’t been as profitable as expected. Additionally, as more jobs and workplaces return to in-person operations rather than remote work, it becomes increasingly challenging to manage a second home.