Vacation-Home Mortgages Have Risen Since the Pandemic Housing Boom

In 2025, U.S. homebuyers secured 4.1% more second-home mortgages compared to the previous year, as reported by Redfin. This represents the first annual increase in four years, following a series of declines from the peak observed during the pandemic in 2021 until 2024. In contrast, mortgages for primary residences experienced a year-over-year increase of 1% in 2025, following a 2% rise in 2024.

The market for second-home purchases is beginning to recover and is outpacing the growth of primary home purchases, primarily driven by affluent buyers who are less affected by the current high housing costs and economic uncertainties. Buyers of vacation homes tend to be wealthier than those acquiring primary residences: in 2025, 85% of vacation-home mortgages were granted to high-income earners, with a median income of nearly $300,000, in contrast to the median U.S. household income of $88,000.

“Vacation homes are making a modest comeback, but it’s a very different market than it was during the pandemic,” said Chen Zhao, Redfin’s Head of Economics Research. “Today’s second-home buyers tend to have the financial flexibility to make a big, discretionary purchase even in an expensive housing market, while many would-be buyers of primary homes are sidelined by high costs. Vacation homes are less appealing for regular Americans than they were during the pandemic because mortgage rates are much higher now and rentals are less lucrative.”

Who’s Purchasing Vacation Homes?

In 2025, Redfin conducted an analysis of vacation home purchasers, categorizing the data according to income level, age, and race:

• High earners: A significant proportion of mortgages for vacation properties, specifically 85.2%, were granted to high-income individuals. These borrowers reported a median income of $294,000 in 2025. In contrast, just under 3% of mortgages were allocated to low-income purchasers, who had a median income of $69,000.
• White individuals: Over four-fifths (81.5%) of vacation-home mortgages were issued to white buyers. Hispanic and Asian homebuyers lag considerably, accounting for 5.6% and 5.2% of vacation-home mortgages, respectively. Black buyers represented 2.2% of the total.
• Gen Xers: Almost one-third (31.1%) of vacation-home mortgages were taken out by individuals aged 55-64, while an additional 27.6% were secured by those aged 45-54 (with Gen Xers being 45-60 in 2025). Following them are the 35-44 age group (18.6%), the 65-74 age group (14.1%), and those under 35 (5.4%).

Recent research from Redfin indicates that the demand for luxury homes is increasing at a significantly faster rate than that for non-luxury homes, with second homes more frequently falling into the luxury category. In 2025, the average value of a second home was $515,000, compared to $395,000 for primary residences.

The rise in second-home purchases can also be attributed to a base effect: in 2024, purchases had plummeted to half of their pre-pandemic levels, creating substantial potential for growth. Consequently, even a modest increase in demand for vacation homes—primarily driven by affluent Americans—was sufficient to yield the first annual rise in four years.

Although the number of second-home purchases has increased, they remain significantly less frequent than during the pandemic and prior to it. This decline is primarily due to record-high prices and elevated mortgage rates, which have dampened the overall housing market; many Americans find themselves unable to afford even one home, let alone a second.

Focusing specifically on the second-home market, demand remains relatively low, mainly because vacation homes are not as essential as primary residences; many potential buyers withdrew from the market when housing prices surged in 2022. Furthermore, the factors that contributed to the vacation-home surge during the pandemic have diminished; as more employees return to their offices, fewer individuals possess the flexibility to utilize a second home. Additionally, for those buyers aiming to earn rental income, the financial landscape has become less advantageous as both long-term and short-term rental markets have softened.

Second-Home Mortgages, Loans & Regional Trends

The proportion of total mortgages allocated to second-home purchasers remained largely unchanged from 2024 to 2025, with 2.7% of all mortgage originations in the previous year designated for second homes, a slight increase from 2.6% in 2024. This figure represents a decline from the peak of 5.1% recorded in 2021.

The overwhelming majority of mortgages are issued to buyers of primary residences. In 2025, these buyers accounted for nearly 90% (87.7%) of all mortgages, compared to 88.1% in 2024 and 86.9% in 2021. The remaining mortgages are allocated to individuals acquiring investment properties, with approximately 10% (9.6%) of all mortgages in 2025 being utilized for investment purposes, an increase from 9.3% in 2024.

In West Palm Beach, FL, second-home mortgages constituted the largest proportion of loan originations, as this area is a favored location for snowbirds and vacationers; it also plays a significant role in the national luxury market. In 2025, nearly 6% of all mortgage originations in the West Palm Beach metro were for second homes.

Following this, the New Brunswick, NJ metro (known for the Jersey Shore) recorded that 4.6% of mortgages in 2025 were for second homes. Riverside, CA (Palm Springs) ranked third, with second-home mortgages accounting for 3.8% of the total. Year-over-year, second-home mortgages increased in all three locations, particularly in New Brunswick, where there was a notable rise of 13%.

Conversely, second-home mortgages were least prevalent in Oakland, CA, and Montgomery County, PA, where they represented only 0.5% of all mortgages. Detroit, Cleveland, and Philadelphia followed closely behind, each with 0.6%.

Conclusion

Mortgage originations for secondary residences saw an increase in 35 out of the 50 most populous metropolitan areas in the U.S. last year. The most significant rise occurred in Montgomery County, PA, which experienced a 28.8% year-over-year growth, followed closely by Indianapolis with a 26.6% increase. However, the purchase of vacation homes remains relatively rare in these regions, as second-home mortgages account for less than 1% of all home loans.

In contrast, second-home loans experienced the largest decline in Las Vegas, where there was a 20.9% year-over-year drop in 2025. Despite this decrease, vacation-home mortgages still represented 2.7% of all home loans, marking the sixth-largest share in the U.S. The next most significant declines were observed in Los Angeles (-19.8%) and Philadelphia (-17.6%), both of which are areas where vacation-home purchases are not particularly common, constituting 1% or less of all loans.

Note: This information is derived from a Redfin analysis of Home Mortgage Disclosure Act (HMDA) data, which encompasses the purchases of second homes, primary residences, and investment properties in the U.S. from 2018 to 2025. In Redfin’s report, the terms “vacation home” and “second home” are used interchangeably.

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