DIY Builds
Photo by A Koolshooter Pexels Logo Photo: A Koolshooter

Is 2022 a good year to buy a second home?

With rising mortgage interest rates and home prices, the demand for second homes in 2022 slowed in almost all the metros compared to 2021 and pre-pandemic demand levels but varied by market.

Why did wd 50 close?
Why did wd 50 close?

Ostensibly, wd-50 is closing because the building is being renovated by luxury condo overlords. Jun 12, 2014

Read More »
Why do English homes have sinks in bedrooms?
Why do English homes have sinks in bedrooms?

Indoor plumbing was an innovation in the Victorian era. In middle-class homes having a separate room for bathing was often a luxury. Bathroom sinks...

Read More »

Higher interest rates and home prices reduce the demand for second homes

Demand for second homes surged after the onset of the COVID-19 pandemic nearly doubling the pre-pandemic demand level in late 2020. Flexibility to work remotely, coupled with record-low interest rates, induced the hike in second home demand in 2020 and 2021.Though remote work remains common in 2022 and will for the foreseeable future, low interest rates have vanished, while home prices are at record highs. As a result, home affordability has decreased for all, whether looking to buy a primary residence or a second home. Loan application data from CoreLogic reveals that second home purchase applications have been declining since the spring 2021 peak and are 19% lower in second quarter for 2022, compared to the same pre-pandemic period in 2019 (Figure 1). In addition to rising interest rates and home prices, the Federal Housing Finance Agency (FHFA) increased fees for second home loans sold to Fannie or Freddie effective April 1, 2022,[1] which contributed to slower demand for second homes.

Figure 1: Second Home Purchase Applications Trend Lower than Pre-pandemic Levels

Source: CoreLogic Fraud Consortium Loan Application data © 2022 CoreLogic,Inc., All rights reserved. The share of mortgage applications for second homes varies nationally. Figure 2 shows the top 10 metros by share of second home mortgage purchase applications in 2022 compared with previous years (sorted by share in 2022).[2] So far in 2022, Ocean City, New Jersey, has the highest share with 56% of mortgage applications being for second homes, a lead Ocean City has held for the past 4 years. Barnstable Town, Massachusetts, ranked second with 32% of mortgage applications for second homes, followed by Salisbury, Maryland (27%) and Naples, Florida (23%). Four metros in Florida were among the top 10 by share of mortgage applications for second homes in 2022. Figure 2: Top 10 metros with highest share of second home purchase applications Source: CoreLogic Fraud Consortium Loan Application data © 2022 CoreLogic,Inc., All rights reserved. With rising mortgage interest rates and home prices, the demand for second homes in 2022 slowed in almost all the metros compared to 2021 and pre-pandemic demand levels but varied by market.[3] Figure 3 shows the top 10 metros with the largest decline in share of mortgage applications for second homes in 2022, compared to 2021. Barnstable Town, Massachusetts, experienced the largest drop in demand with 11 percentage points in mortgage applications for second homes in 2022 from 2021 and a 10 percentage points drop from 2020. Low inventory coupled with rising interest rates and home prices are the contributing factors. However, it is still slightly higher compared with the 2019 share. Naples, Florida ranked second with a 10 percentage points decline in the share of mortgage applications for second homes compared to 2021 and a 7 percentage points drop from 2020. The demand for second homes is likely to decline as the cost of borrowing money increases with rising interest rates and lender costs such as the FHFA fee increase on second home loans. Rising home prices will also deter the demand for second home. Figure 3: Top 10 metros with biggest decline in share of second home purchase applications Source: CoreLogic Fraud Consortium Loan Application data. Note: The changes are in percentage points. © 2022 CoreLogic,Inc., All rights reserved.

[1] See FHFA press release

[2] The analysis is based on all home-purchase mortgage applications, accepted or not, from January 2019 to July 2022. [3] More people are choosing to travel now as most travel restrictions have been lifted.

What adds the most value to a home 2022?
What adds the most value to a home 2022?

Below are ten home improvement projects with the highest return on investment in 2022. Landscaping. Curb appeal says a lot about your home. ......

Read More »
What sits on top of the sill plate?
What sits on top of the sill plate?

The first floor frame is built on top of the sill plate. A home's floor frame consists of common joists which span across the foundation walls, and...

Read More »

Does Tuff Shed make custom sizes?

Here at TUFF SHED we design every building with customization in mind. While our product assortment starts with standard models and sizes, our ability to customize backyard buildings is unparalleled.

Here at TUFF SHED we design every building with customization in mind. While our product assortment starts with standard models and sizes, our ability to customize backyard buildings is unparalleled. That’s because we always give our customers the choice to add options such as windows, paint, vents, shelving and lofts, plus we allow our customers to take customization one step further, giving them the opportunity to add elements like porches, alter the building “footprint”, increase the roof pitch, add tile shingles or metal roof, change to lap siding, etc. This level of customization really sets TUFF SHED apart. Whether you want your TUFF SHED garage to perfectly match your house, like the building featured in the top photo, or if you’ve always dreamed of owning your own observatory (no-kidding), like the one-of-a-kind building in the bottom photo, we can customize your building to meet your every need!

How to waterproof wood cheaply?
How to waterproof wood cheaply?

There are three surefire ways to waterproof your wood for years to come. Use linseed or Tung oil to create a beautiful and protective hand-rubbed...

Read More »
Do you have to pay taxes on Airbnb income?
Do you have to pay taxes on Airbnb income?

The US Internal Revenue Service (IRS) requires US companies that process payments, including Airbnb, to report gross earnings for all US users who...

Read More »
Does painting preserve wood?
Does painting preserve wood?

Paints. Of all finishes, paints provide the most protection for wood against ultraviolet degradation and simple erosion. A painted surface retards...

Read More »
Are shed plans easy to follow?
Are shed plans easy to follow?

These are! They guide you every step of the way to complete your dream shed.

Learn More »
Is it cheaper to turn a shed into a house?
Is it cheaper to turn a shed into a house?

2) It can be cheaper. This means you should be able to pick up a higher-quality product for less money than it would cost you to make a lower-...

Read More »