Homebuyers continue to navigate a difficult housing market as home prices go up, home listings go down, and higher than usual demand for secondary homes adds another level of competition. By analyzing mortgage application data from real estate analytics firm Optimal Blue, Redfin discovered secondary home demand far exceeded primary home demand between January 2020 and January 2021. As a result, those taking the traditional route by moving from one primary home to another face healthy competition. The analysis reviewed requests for interest-rate locks by mortgage applicants, says The New York Times. Rate locks are used most often for forthcoming purchases, making it a good indicator of secondary home demand.
Increased home demand predates the pandemic. Back in January 2020, rate locks for secondary homes were 51 percent higher than a year earlier, compared to 33 percent higher for primary homes. But as the pandemic set in, the growth in secondary-home rate locks spiked: By September 2020, rate-lock growth for those homes had ballooned by 118 percent year over year, while primary homes had grown by a lesser, though still formidable, 65 percent.