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After a surge in second home sales at the peak of the pandemic, demand for vacation homes fell sharply in February as mortgage-rate locks reached their lowest level since May 2020, according to Forbes. While January saw an 87% increase in demand for second homes from pre-pandemic levels, the share of vacation house hunters dropped to 35% in February.

For the first time since the start of the pandemic, demand for primary residences outpaced that of vacation homes in February, and that trend could continue as the Fed drives up mortgage rates to combat high inflation.

Demand for second homes started soaring in mid-2020 as the pandemic took hold, reaching a peak in March 2021, with demand up 95% from pre-pandemic levels. The combination of remote work, record-low mortgage rates and a desire to get away from crowds motivated many affluent Americans to buy vacation homes. But last month demand fell sharply from the month before as mortgage rates rose.

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