So much for this second home boom?

Second homes have grown along with the rest of the housing market during the pandemic. Their overall appeal is largely twofold: people buy them to use as a getaway for fun and / or to work from home in a nice place, and / or as an investment home to rent from. others when you are not there yourself.

Now there is a new report which indicates some cooling of this segment of the residential real estate market in our just land.

Red tuna (NASDAQ: RDFN) said in a recent blog that “demand for second homes fell 21% year-on-year in July, the second consecutive month of annual decline in mortgage buyouts. This follows 13 months of strong activity in second home purchases. “

Lock in a rate in a market that is slowing down slightly

Tracking mortgage rate freezes – in which a lender guarantees a rate for a period defined as 30 or 45 days – is a good way to assess market activity, as each indicates that a buyer and seller have likely made an agreement.

The buyer must tell the lender whether the mortgage is for a primary residence, a secondary residence or an investment property such as a rental. Redfin says about 80% of all mortgage locks result in an actual purchase, so a drop in those seems to indicate a drop in sales.

Indeed, similar performance has been seen recently in other metrics, such as sales of newly built homes. And Redfin reported last week that while the nationwide median home selling price was a record high of $ 362,750, that metric was actually stable for the four-week period ending July 25, the first time around. since early March.

The ad service also said mortgage freeze data showed demand for major home purchases fell 4% year-on-year in July, marking the first time that the rate of growth in demand for homes fell. secondary buildings was lower than that of the main houses since April 2020 at the height of pandemic lockdowns.

Millionacres net profit

High prices are likely driving down mortgage lockdowns and sales of new and existing homes, as affordability issues affect the second home market as surely as they do for primary residences. .

A slowdown is not a stop, especially in this new normal. The market is still way ahead of last year and, in fact, for many years, so slowing growth rates don’t mean a collapse is in sight. Second homes are no exception.

“The demand for second homes remains well above pre-pandemic levels, and we can expect the high level of interest in vacation homes to persist in the new era of remote working,” said the Redfin senior economist Taylor Marr in this week’s blog. “If you build it – in the midst of a historic housing shortage – they will come. I expect vacation homes to remain popular as more homes are built. “

Unfair Advantages: How Real Estate Became a Billionaire Factory

You are probably aware that real estate has long been the playground of the rich and well-connected, and that according to recently released data, it is also the best-performing investment in modern history. And with an unfair set of benefits that are completely unheard of with other investments, it’s no surprise why.

But those barriers have collapsed – and it’s now possible to create REAL wealth through real estate at a fraction of what it used to cost, meaning unfair benefits are now available to people like you.

To get started, we’ve put together a comprehensive guide that describes everything you need to know about investing in real estate – and made it available for FREE today. Just click here to learn more and access your free copy.

The Motley Fool has a disclosure policy. Editorial opinions are our own and have not been previously reviewed, endorsed or endorsed by the included advertisers. The editorial content of Millionacres is separate from the editorial content of The Motley Fool and is created by a different team of analysts.

Source link

About Scott Conley

Check Also

Mortgage Rates Today Drop Below 3.5% | 22 November 2021

November 22, 2021 7:19 AM Leslie Cook Posted: November 22, 2021 7:19 AM Update: November …

Leave a Reply

Your email address will not be published. Required fields are marked *