2024 Saw Demand for Second Homes Dwindle

Whether you call it a second home or a vacation home, one thing is clear: Demand for second homes has fallen as housing costs have continued to rise. According to recent analysis by real estate marketing platform Redfin, which looked at Home Mortgage Disclosure Act data from 2018 to 2024, homebuyers across the U.S. took out 86,604 mortgages for second homes during 2024—the lowest level recorded since 2018 and 5% lower than in 2023.

The demand for new mortgages fell even further in the few years leading up to 2024. In 2023, for instance, second-home mortgages decreased by 40% year-over-year, and in 2022, second-home mortgages declined by 42%. Additionally, second-home mortgages made up just 2.6% of all mortgages in 2024, down from 2.8% the year prior.

Where Has Second-Home Demand Changed the Most?

Of all states, Florida saw demand for second homes fall the fastest. In Miami, second-home mortgage originations decreased by 32.2% in 2024, which was more than any other major U.S. metro. Miami was followed closely by Orlando, Fla., which saw a 28.4% decline in second-home mortgages, and then West Palm Beach, Fla., which saw second-home mortgages fall by 28%.

Meanwhile, over the past year, mortgages for second homes increased the most in Detroit, San Francisco, and San Jose, Calif. 

The increases were 26% in Detroit, 17% in San Francisco, and 15.9% in San Jose. Even so, it's worth noting that vacation-home mortgages make up just a small portion of all mortgages in any of those metros: less than 1% in Detroit and San Jose, and only 1.7% in San Francisco. 

Has owning a second home become less appealing?

There are several reasons why Americans took out fewer mortgages for second homes, according to Redifin:

• Second homes are more expensive: In 2024, the median value nationwide for primary homes was $385,000, while the median value for a vacation home was $495,000.
• Loan fees increased: In 2022, loan fees rose for second homes, which made buying these homes more expensive.
• Second homes aren't essential: Unlike primary homes, vacation homes are not a necessity, and with rising inflation, Americans are sticking to the essentials and curbing their discretionary spending.
• The rental market cooled: As asking rents stagnate and the short-term rental market cools, purchasing a second home to rent it out is less appealing.
• More people returned to in-office work: Post-pandemic, many workers returned to the office and now have less time to spend in a second home.

 See who is currently buying second homes