Redfin: Demand for Vacation Homes Falls

(Image courtesy of Redfin)

Redfin, Seattle, found that the demand for vacation and second homes has dropped to the lowest level in at least six years.

Homebuyers in 2024 took out 86,604 mortgages for second homes, the lowest level in records dating back to 2018. That rate is also down 5% from 2023.

This is also a big contrast from the spike during the pandemic buying boom. In 2020, Americans took out 229,199 mortgages for second homes; in 2021 that number hit 258,289.

Second-home mortgages were 2.6% of all mortgages in 2024, down from 2.8% in 2023. During the boom, the rate hit 5% in 2020.

Redfin pointed to a number of reasons for the decrease, including the sheer price of second homes. Economic factors–such as inflation and Americans attempting to cut back on unnecessary expenses–also played a role.

And, the rental market has cooled, meaning it’s a less attractive concept for those who intended to rent their second residences at least part time. Finally, more and more workers have been brought into their offices part- or full-time.

“Most people aren’t buying vacation homes at all because mortgage rates and insurance costs–especially for waterfront homes and condos–have skyrocketed. Plus, people know they’re unlikely to earn much revenue from listing on Airbnb now that occupancy rates are down,” noted Lindsay Garcia, a Redfin Premier Agent in Fort Lauderdale, Fla. “While some wealthy cash buyers are still purchasing second homes, they are much more likely to make a low-ball offer or request concessions than they used to be.”