Mortgage Originations For Vacation Homes Down 40% In 2023
WRE News May 15, 2024
Buyer
WRE News May 15, 2024
Buyer
Enthusiasm for vacation homes waned during 2023, according to new data from Redfin (NASDAQ:RDFN).
Last year, homebuyers took out 90,772 mortgages for second homes in 2023, down 40% from a year earlier and down 65% from the pandemic housing boom’s 2021 peak. In comparison, mortgages for primary homes fell 20% year-over-year in 2023 and were down 35% from 2021.
Only 3% of all mortgages went to second-home buyers in 2023, down from 5% in 2020. Redfin attributed the souring on second homes to increased costs – the typical second home was worth $475,000 in 2023, versus $375,000 for primary homes – and to the federal government’s increased loan fees for second homes.
As for those seeking vacation homes, 86% of second-home mortgages were issued last year to high-income buyers, while nearly four in five (79%) vacation-home mortgages went to White homebuyers and roughly 58% went to Gen Xers. Second-home mortgages recorded their largest share of originations in West Palm Beach, Florida, where just under 7% of all mortgage originations last year were for second homes, followed by Orlando (4.1%), Riverside, California (4%), New Brunswick, New Jersey (3.9%) and Tampa (3.6%).
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