While overall home sales show signs of cooling as prices rise and buyers step back, NAR Economist Yun doesn’t see that reflected in sales of vacation homes.
CHICAGO – The vacation-home market has boomed over the past year and is not likely to slow any time soon, even as the rest of the housing market starts to cool, says Lawrence Yun, chief economist for the National Association of Realtors® (NAR), in an interview for The Escape Home, a newsletter for second-home owners.
Even as companies bring employees back to the office, vacation homes will remain in demand, Yun said, though part of vacation homes’ rise in popularity has been attributed to the growth in remote work.
Overall, home sales show some signs of cooling, with many first-time homebuyers getting priced out of the market, Yun says. The median existing-home price for all housing types was $359,900 in July, nearly an 18% increase from a year ago.
Mortgage rates are also likely to increase, which could make buying even more expensive. NAR predicts that mortgage rates will rise to 3.5% by mid-2022, as the Federal Reserve likely begins to reduce its bond purchases before the end of 2021.
But vacation homes will remain a hot commodity. Rental prices for vacation homes will likely continue to rise too, Yun says.
“One near-certain aspect of the post-pandemic economy, when it comes, is the flexible work schedule,” Yun told The Escape Home. “It is very hard to envision five days a week in the office. Therefore, vacation-home sales will continue to move higher this year, next year and for the foreseeable future.”
Source: “What’s Next for the Real Estate Market? We Asked the Chief Economist at the National Association of REALTORS®,” MarketWatch/The Escape Home (Sept. 18, 2021)
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