The housing inventory shortage is not just limited to California, as the nation trend points to high demand with low options. However, the New York Times reports that of the bidding wars happening in cities large and small, it’s not traditional sales—that is, selling one home to move into another home—that are creating heat in the market.
The demand for second homes easily surpassed demand for primary homes between January 2020 and January 2021, according to a Redfin‘s analysis of mortgage application data from Optimal Blue, a real estate analytics firm.
As the NYT’s shares, requests for interest-rate locks can indicate whether the home is intended for a primary or secondary residence, and Redfin’s assessment of the data shows increased second-home demand throughout 2020. Pre-COVID, in January 2020, rate locks for secondary homes were 51 percent higher than a year earlier. By June 2020, that increase jumped to 110 percent year-over-year, hitting peak interest in September at 118 percent.
As the data set shows, primary home interest remained high throughout nearly all of 2020 as well, though not nearly at the same rate as interest for secondary homes.