Second-home mortgage originations increased in 2025 for the first time since the pandemic-era buying boom, revealing a modest but potentially valuable purchase niche concentrated among affluent, middle-aged borrowers.
U.S. homebuyers took out 4.1% more mortgages for second homes in 2025 than they did a year earlier, according to a Redfin analysis of Home Mortgage Disclosure Act data. By comparison, mortgages used to purchase primary residences increased 1%.
Second-home originations increased to 90,413 in 2025 from 86,870 in 2024. The increase ended three consecutive years of declines following the market’s 2021 peak.
The numbers, however, do not signal a return to the pandemic vacation-home frenzy. Second-home loan volume remained roughly half its 2019 level and 65% below the 2021 peak of 258,289 originations.
Second-home mortgages represented just 2.7% of all mortgage originations in 2025, virtually unchanged from 2.6% in 2024 and well below the 5.1% share recorded in 2021. Because demand had already fallen sharply, a relatively small increase was enough to produce the category’s first annual gain in four years.
“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.”
Affluent Borrowers Dominate The Market
Second-home lending is increasingly concentrated among borrowers who are less constrained by elevated mortgage rates and home prices.
Borrowers Redfin classified as high earners received 85.2% of vacation-home mortgages in 2025. Those borrowers reported a median income of $294,000, compared with an overall U.S. median household income of $88,000.
Less than 3% of second-home mortgages went to borrowers classified as low income, whose median income was $69,000.
The median reported value of a second home was $515,000 in 2025, compared with $395,000 for a primary residence. Redfin said the HMDA property values represent either the sale price or appraised value reported by the mortgage originator.
Age was another defining characteristic. Borrowers ages 55 to 64 received 31.1% of second-home mortgages, while those ages 45 to 54 accounted for another 27.6%. Combined, borrowers between 45 and 64 represented nearly 59% of the market.
Borrowers ages 35 to 44 represented 18.6% of second-home mortgages, followed by those ages 65 to 74 at 14.1%. People younger than 35 received just 5.4%.
The market also showed a pronounced racial disparity. White borrowers received 81.5% of second-home mortgages in 2025, while Hispanic borrowers received 5.6%, Asian borrowers 5.2%, and Black borrowers 2.2%, according to Redfin.
Second Homes Remain A Discretionary Purchase
Several factors continue to constrain the market, including high home prices, elevated mortgage rates, reduced remote-work flexibility, and weaker economics for owners hoping to generate rental income.
Vacation homes are also discretionary in a way primary residences are not, making demand more sensitive to economic uncertainty and changes in borrowing 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,” Zhao said.
Primary residences continued to account for the overwhelming majority of the mortgage market in 2025, representing 87.7% of originations. Investment properties accounted for 9.6%, while second homes made up the remaining 2.7%.
That distinction matters for originators working with buyers who expect to rent their properties. Whether a loan qualifies as a second-home or investment-property mortgage depends on the borrower’s intended occupancy and applicable underwriting requirements.
The income, age, and property-value data point to a narrowly defined prospect rather than a broad-based housing recovery. For originators, potential financing conversations could extend beyond a conventional second-home mortgage to jumbo loans, home-equity products secured by an existing residence, and other options suited to borrowers with substantial income or assets. A property intended primarily to generate rental income, however, may need to be financed as an investment property rather than a second home.
Market Share And Loan Volume Tell Different Stories
Second-home mortgage originations increased in 35 of the 50 largest U.S. metropolitan areas in 2025, although the size and significance of those gains varied widely.
West Palm Beach, Florida, had the highest concentration of second-home lending. Vacation-home mortgages accounted for 5.5% of all originations in the metro during 2025.
The New Brunswick, New Jersey, metro, which includes access to Jersey Shore communities, ranked second at 4.6%. Second-home originations there increased 13% from the previous year.
Riverside, California, which includes Palm Springs, followed, with second-home mortgages representing 3.8% of all originations.
The markets with the highest concentrations were not necessarily those producing the most loans. Phoenix recorded the largest number of second-home originations among the 50 metros studied, with 2,033, followed by Riverside with 1,464; Tampa, Florida, with 1,107; and New Brunswick with 1,060.
Tampa illustrates the difference between market size and recent momentum. It produced the third-highest number of second-home mortgages despite a 13.8% annual decline.
The largest percentage increases occurred in markets where vacation-home lending remains relatively uncommon. Second-home originations rose 28.8% in Montgomery County, Pennsylvania, and 26.6% in Indianapolis, but still represented less than 1% of all mortgages in both markets.
Las Vegas recorded the steepest decline, with second-home mortgages falling 20.9%, although the category still represented 2.7% of the metro’s originations. Los Angeles followed with a 19.8% decrease, while Philadelphia experienced a 17.6% decline.
Second-home financing remains a small segment of the overall mortgage business, but its first annual increase since 2021 points to selective purchase demand among borrowers with the income and financial flexibility to remain active in an expensive market.
*This article was primarily written by a human author. AI tools were used in a limited capacity for research assistance or light editing.
