Mortgage applications for second homes skyrocketed by 84% in January on a year-over-year basis, according to new data from Redfin Corp (NASDAQ: RDFN).

What Happened: January's application level marked the eighth consecutive month of year-over-year growth for second home mortgage applications. The peak for this demand was recorded last September, with an 118% year-over-year surge.

In comparison, mortgage applications for primary residences registered a 36% year-over-year increase in January, below the September high of 65% and the smallest increase since May.

Many of the second home markets that experienced increased sales activity were included in Redfin's recently published "Hottest Neighborhoods of 2021" survey, with resort areas including California's Lake Tahoe and Big Bear, Vermont's Chester and Andover, and Maine's Sebago Lake among the top destinations on that list.

Why It Happened: Redfin attributed January's surge in second home mortgage applications to a combination of historically low mortgage rates and a continuation of the COVID-19 pandemic that has white-collars workers and school children still moored in their homes.

"Although demand is down slightly from the fall peak, the fact that nearly twice as many second-home buyers submitted applications in January as the year before means the popularity of vacation towns is not a fad," Redfin Economist Taylor Marr said in a statement.

"Many Americans have realized remote work is here to stay, allowing some fortunate people to work from a lakefront cabin or ski condo indefinitely."

What Happens Next: Yet Marr said not everyone was able to take advantage of affording a second home in a fancy vacation resort, noting that "it has become even more difficult for many lower-income people to buy a primary residence as home values rise and the recession disproportionately impacts employees in the service sector."

Nonetheless, the housing market is showing no signs of cooling. Redfin noted that total home sales were up 16% year-over-year in December, the fourth-biggest increase on record, while pending sales were up 35%.

The median sale price for homes in seasonal towns rose 19% year-over-year in December to $408,000. In comparison, home prices in non-seasonal towns grew 13% to $365,000 over the same time period.

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