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Mortgage rate locks for second homes were down 52 percent from pre-pandemic levels on a seasonally adjusted basis across the country in March, according to a new report from Redfin.

That is compared to a 13 percent decline for primary homes, the combination brokerage and listings portal reported after analyzing rate lock data from Black Knight subsidiary Optimal Blue.

February had the lowest level of demand for second homes, as measured by mortgage rate locks, since 2016, a level of demand that remained nearly as low in March. High-end housing markets are often dragged down by choppiness in the economy or in financial markets, as wealthy buyers seek to avoid making big outlays. As now, the American stock markets were highly volatile in February 2016, and in fact entered the first bear market since the Great Recession that month.

“With housing payments near their all-time high; a lot of people can’t afford to buy one home right now, let alone a second,” said Redfin Deputy Chief Economist Taylor Marr. “Add the recent increase in loan fees, inflation, shaky financial markets, the end of pandemic-related financial stimulus and many companies calling workers back to the office, and it’s simply a challenging time for most Americans to buy a vacation home.”

The drop in second-home demand follows a meteoric rise during the pandemic homebuying boom. Mortgage-rate locks for second homes reached a peak of 89 percent above pre-pandemic levels in August 2020. At that time, many affluent Americans bought homes in vacation destinations, encouraged by low mortgage rates, remote work, and limitations on traveling from place to place.

Redfin researchers blamed the drop in second-home demand on several major factors:

• Many potential second-home buyers are priced out because it’s frequently more expensive to buy a vacation home than a primary home. The typical second home was worth $465,000 in 2022, versus $375,000 for a primary home.
• Additionally, the federal government increased loan fees for second homes in April 2022.
• Vacation-home buyers are quicker to pull back from the market than primary-home buyers because second homes aren’t a necessity.
• Workers are returning to the office. Second homes are less attractive when there’s less time to spend in them. While working from home is more common than it was before the pandemic, the share of job openings that allow remote work has shrunk since early 2022.
• Buying a vacation home to rent it out is nowhere near as attractive as it was during the pandemic homebuying and investing boom. Owners of short-term rentals are reporting a steep decline in business. That’s because many people became vacation-rental hosts during the pandemic, which led to oversupply. Many local governments are also instituting new short-term-rental regulations, like new taxes and stricter permitting. The long-term rental market is also cooling.
• Bank accounts are shrinking as stock markets decline, so would-be buyers have less cash on hand for down payments and monthly payments.
• Many people with the means and desire to buy a second home have already done so, during the pandemic homebuying boom of 2020 and 2021.