According to property broker Redfin, mortgages for second homes in the US were down 52% from pre-pandemic levels on a seasonally adjusted basis in March 2023. That is compared to a 13% decline for primary homes.

The number of mortgages for second homes have now fallen to the lowest level since 2016.

The drop in second-home demand follows a meteoric rise during the pandemic homebuying boom. At that time, many affluent Americans bought homes in vacation destinations, encouraged by low mortgage rates, remote work, and limitations on traveling abroad.

However, now that prices have increased so much, many potential second-home buyers are priced out because it’s often more expensive to buy a vacation home than it is to buy a primary home. The typical second home was worth $465,000 in the US last year, compared to $375,000 for a primary home. Additionally, the federal government increased mortgage loan fees for second homes in April 2022.

As a result, owners of short-term rentals in the US are reporting a steep decline in business. Redfin says that this is due to the rise in supply, as many holiday home owners decided to rent their second homes for the first time during the pandemic.