Where Have All the Vacation Home Buyers Gone? Exploring the 2024 Decline

The frenzy of vacation home purchases that defined the pandemic years has cooled off considerably. In 2024, U.S. buyers secured just over 86,000 mortgages for second homes—a drop of 5% from the previous year and the lowest point since data tracking began in 2018. This dramatic slowdown follows the highs of 2020 and 2021, when remote work and low interest rates drove a surge in second-home ownership.

Though the rate of decline has eased, the numbers show that “second-home mortgages made up just 2.6% of all mortgages in 2024—the lowest share on record.” Today’s buyers are facing a far different landscape than just a few years ago.

Why the Market Is Cooling

The retreat from vacation home buying is being driven by a combination of affordability challenges, changing work dynamics, and evolving investment strategies.

• Bigger Price Tags: The median price of a second home in 2024 stood at $495,000, a significant jump compared to $385,000 for primary homes.

• More Expensive Loans: Financing a second home has become less attractive, particularly after 2022, when additional fees on these loans increased overall borrowing costs.

• Fewer Personal Benefits: With remote work scaling back, many professionals simply don’t have the time or flexibility to make regular use of a second home.

• Weaker Rental Returns: The slowing growth in rent prices and softening of the short-term rental market make second homes less lucrative as investment properties.

• Discretionary Cuts: As the cost of living rises, buyers are prioritizing essential expenses, and second homes—often seen as luxuries—are no longer top of mind.

Florida Leads the Slide

Florida metros have seen some of the most significant drops in second-home demand. In 2024, Miami recorded a 32.2% year-over-year decline in second-home mortgage originations, followed closely by Orlando, Fort Lauderdale, West Palm Beach, and Tampa.

A mix of rising insurance costs, increased HOA fees, and growing concern over natural disasters has made the state less attractive to vacation-home seekers. That said, places like West Palm Beach still hold a strong appeal, leading the nation with the highest share of second-home mortgages at 5.6%.

Who's Still Buying?

Despite the overall decline, a select group of buyers continues to dominate the second-home space:

• High-Income Earners: Nearly 90% of second-home mortgages in 2024 were issued to households earning $280,000 or more.

• Middle-Aged Buyers: The bulk of purchases came from individuals aged 45 to 64, though baby boomers—those 65 and older—were the only group to increase their second-home activity over the previous year.

• Predominantly White Buyers: White Americans accounted for nearly 80% of vacation-home mortgage originations, a much larger share than other racial groups.

What’s Happening in California and Orange County?

Though Florida is experiencing the sharpest pullback, California is not immune. Cities like Anaheim, San Diego, and Los Angeles all saw year-over-year declines in second-home mortgages, ranging from 10% to nearly 12%.

However, Riverside—which includes sought-after desert getaways like Palm Springs—still ranks among the top in second-home market share at 3.5%. In Orange County, known for its coastal charm and luxury lifestyle, demand remains steady among affluent buyers despite the broader national slowdown.

Bottomline

While national trends show a cool-off in vacation home demand, Orange County continues to attract discerning buyers seeking sun, style, and long-term value. Whether you're downsizing, upgrading, or investing, understanding these market shifts is essential to making smart moves. If you’re thinking about buying or selling a home in Orange County, let Whitestone Real Estate be your trusted guide to navigating today’s real estate landscape with confidence and clarity.

Reference: Anderson, D. (2025, May 8). Demand For Vacation Homes Drops to Lowest Level Since at Least 2018. Redfin.