BiggerPockets Daily
Vacation Property Purchases Slow to 6-Year Low
May 10, 2025
The demand for vacation homes has plummeted to a six-year low, altering the investment landscape significantly. Rising costs and the shift to remote work are causing buyers to rethink their second-home purchases. Notably, areas like Florida are experiencing sharp declines, while cities like Detroit see surprising upticks. This shift is prompting a move toward regional markets in the Southeast, offering unique investment opportunities amidst decreased competition in traditional hotspots.
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Quick takeaways
- The sharp decline in vacation home purchases is driven by rising costs, tighter lending, and a shift back to in-office work.
- While overall demand is down, specific regional markets, particularly accessible areas, may still offer viable investment opportunities.
Deep dives
Decline in Vacation Home Demand
The demand for vacation homes has significantly dropped, with Americans purchasing only 86,604 second homes in 2024, marking the lowest level since 2018. This decline represents a 5% decrease from the previous year and is part of a broader trend following the pandemic-era boom. The share of second home mortgage originations has also halved since its peak in 2020, falling to just 2.6% of all mortgage originations. This sharp downturn signals a shift in the real estate market that extends beyond lifestyle choices, presenting critical implications for real estate investment strategies.
