With remote work becoming much more common, the second-home market has enjoyed strong growth and data suggests builders are responding to that trend.
The advent of remote work means no more commute, and so many Americans have decided to invest in a second home far from the city, in more pleasant climes where they have more freedom to spend time outdoors.
Now, data from the National Association of Home Builders says that single-family construction in traditional second home markets grew by an average of 13.6%, compared to just 10.5% in other counties.
Multifamily development in second-home markets is also on the rise. That sector of the market saw construction increase by 11.1% in second-home counties. In contrast, it declined by 0.9% in other areas during the third quarter, according to the NAHB.
The NAHB defines “high-concentration second-home counties” as those where the majority of homes are not classified as the taxpayer’s principal residence, and where there are a big portion of non-rental properties.
In 2018, Americans owned around 7.4 million second homes, which accounted for around 5.6% of the country’s entire housing stock.
“In addition to generating a suburban shift, the COVID-19 pandemic also produced demand changes that benefited second-home communities,” the NAHB said in its Eye on Housing blog. Many of these communities are located in less densely populated areas, such as small towns or rural areas. Nearly 70% of second-home counties are located in rural areas, the research shows.
“Remote work arrangements have made it possible for some wealthier Americans to move to alternate locations that are not just small, suburban shifts from within their current metro area,” the NAHB added. “More fundamentally, second-home demand may also be benefiting by an acceleration of retirement plans, as well as stock market gains.”