Second home and vacation home sales have soared in the last year as the pandemic pushed families who can afford them to look for larger homes and alternatives to their primary homes in urban areas, and the ability to take advantage of remote work options.

Demand for second homes is up 128% from this same time last year, whereas demand for primary homes is up 34% from this time last year, according to real estate listing firm Redfin.

That demand is not expected to slow, but Fannie Mae and Freddie Mac have raised a hurdle. The two now limit the share of second home and investment property mortgages they will buy from lenders to just 7% of their portfolios.

“This is because Fannie Mae’s mission is to support homeownership, so it doesn’t make sense to be supporting second homes or investment homes. Instead they will focus more of their portfolios on primary homes which will hopefully give more opportunities to first time homebuyers and owner-occupants,” said Daryl Fairweather at Redfin.

That certainly doesn’t shut potential second home or vacation home buyers out of the mortgage market. Many lenders hold their own loans, or sell them to investors, not Fannie Mae or Freddie Mac. Second home mortgages are a good investment.

“Buying a loan from someone who is getting a second home can be a safe bet because that person is probably very financially stable. So if investors believe that purchasing second home mortgages is a safe bet, then the market won’t really be impacted,” Fairweather said.

The new Fannie and Freddie restrictions will likely increase mortgage rates for second home buyers, but it may mean mortgage rates for primary buyers fall, Redfin said.

It could change what owners of two homes call their primary residence because people moving from expensive cities to affordable areas might choose to buy the second home as a primary residence to get the best mortgage rate.

“When somebody is deciding to move, say from an expensive part of the country like Washington, D.C., to a more rural part of Maryland or Virginia or something like that, they will probably be more inclined to sell their home that they are leaving behind instead of holding onto it as an investment property,” Fairweather said.

Institutional investors who purchase homes with cash they raise by other means will not be impacted by the change either, Redfin said.

EDITOR’S NOTE: An earlier version of this story inaccurately attributed the wrong real estate organization.