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Demand For Trip-House Mortgages Fell 40% in 2023 As Housing Prices Rose to File Excessive

  • Demand for second-home mortgages fell twice as fast as mortgage demand for primary homes, as housing costs rose to new heights.
  • An early look at this year’s data shows that demand for vacation homes hasn’t picked up in 2024; interest in second-home mortgages has been sitting near an 8-year low all year. 
  • Many of the people who did take out mortgages for second homes last year were high earners, white and/or Gen Xers. 
  • Austin and the Bay Area saw the biggest declines in mortgages for second homes in 2023.

U.S. homebuyers took out 90,772 mortgages for second homes in 2023, down 40% from a year earlier and down 65% from the height of the pandemic housing boom in 2021.

For the sake of comparison, mortgages for primary homes fell at half that rate; they were down 20% year over year in 2023 and down 35% from 2021. 

This is according to a Redfin analysis of Home Mortgage Disclosure Act (HMDA) data covering purchases of second homes, primary homes and investment properties from 2018 to 2023. The term “vacation home” is used interchangeably with “second home” in this report. 

Home purchases fell across the board last year due to low inventory, high mortgage rates, and high home prices; 2023 was the least affordable year on record. Affordability hasn’t improved in 2024; monthly housing costs are at an all-time high. Mortgages for second homes dropped more than mortgages for primary homes for several reasons:

  • It’s more expensive to buy a second home. The typical second home was worth $475,000 in 2023, versus $375,000 for primary homes. Additionally, the federal government increased loan fees for second homes in 2022, upping the total cost of buying one. 
  • Vacation homes aren’t a necessity the way primary homes are, so when housing costs skyrocket, many prospective second-home buyers back off. 
  • Purchasing a second home for your own use is a less attractive proposition than it was a few years ago because many companies are now requiring their employees to return to the office, meaning there’s less time to spend in vacation homes. 
  • Purchasing a second home to rent it out is also a less attractive proposition than it once was because the rental market has cooled from its pandemic peak, and owners of short-term rentals on sites like Airbnb are generally earning less revenue

“Soaring prices pushed down demand for vacation homes last year, both for cash buyers and those getting a mortgage–but the latter pulled back even more because high rates exacerbated high prices,” said Phoenix Redfin Premier agent Heather Mahmood-Corley. “There has been a small uptick in interest in second homes this year, mostly from cash buyers who plan to eventually move in full time. People who would need a mortgage are still sitting on the sidelines, waiting for rates to come down–especially because rates are typically even higher for second homes than primary homes.”

Just 3% of all mortgages went to second-home buyers in 2023, down from 5% in 2020

The share of total mortgages that went to second-home buyers also dropped last year: 2.8% of all mortgage originations in 2023 were for second homes, down from 3.6% in 2022 and 5.1% in 2021. 

The vast majority of mortgages go to buyers of primary homes: They took out nearly nine in 10 (88.6%) mortgages in 2023, 87.2% in 2022 and 89.2% in 2020. The remainder go to those buying investment properties, with 8.6% of all mortgages taken out in 2023 used for investment properties, compared with 9.2% in 2022 and 5.9% in 2020. 

Vacation-home demand hasn’t picked up in 2024

An early look at this year’s data shows that demand for second homes hasn’t picked up in 2024. Mortgage-rate locks for second homes have been sitting near their eight-year low since the beginning of this year, according to a separate Redfin analysis of data from Optimal Blue. They declined 7.3% from a year earlier in April. By comparison, mortgage-rate locks for primary homes declined 1.6%.

Please note that Optimal Blue data is different from the HMDA data used in the rest of this report. Optimal Blue data is a leading indicator because it measures mortgage-rate locks (an agreement between a buyer and a lender that locks in a rate for a period of time; roughly 80% result in home purchases) as opposed to mortgage originations, and it includes a sample of U.S. mortgages rather than all U.S. mortgages. 

The people who are buying vacation homes: Affluent, white, Gen X

So, who did buy vacation homes in 2023? We broke the data down by  income level, race and age:

High earners: The vast majority of people who took out mortgages for vacation homes in 2023 were–unsurprisingly–high earners. Nearly nine in 10 (86%) second-home mortgages issued last year went to high-income buyers. Just under 3% went to low-income buyers. (The nationwide median household income of home purchasers in the HMDA data is $178,000 for high-income buyers and $65,000 for low-income buyers.)

White people: Nearly four in five (79%) vacation-home mortgages went to white homebuyers in 2023. Asian and Hispanic homebuyers come next, with 6.4% and 6.2% of new vacation-home mortgages, respectively. Buyers who identify as more than one race took out 5.4% of second-home mortgages, and Black buyers took out 2.7%.

Gen Xers: 29.5% of vacation-home mortgages went to 55-64 year olds in 2023, and another 28.6% went to 45-54 year olds (Gen Xers were 43-58 in 2023). Next come 35-44 year olds (21%), 65-74 year olds (11.4%) and people under 35 (6.9%). 

Second-home mortgages dropped most in Austin and the Bay Area

Mortgage originations for second homes fell in all major U.S. metros last year. They fell most in Austin, TX, with a 62.5% year-over-year drop in 2023. Austin’s housing market slowed substantially across the board last year as the pandemic migration boom waned and housing costs climbed too high for many locals.  The next-biggest declines for second-home mortgages were mostly in expensive coastal cities: San Francisco (-57.6%), New York (-53.9%), Seattle (-53%) and Nashville, TN (-51.3%). 

The smallest declines in second-home mortgages were in relatively affordable metros in the middle of the country and on the East Coast: St. Louis (-25.2% year over year), Kansas City, MO (-31.1%), Providence, RI (-31.1%), Montgomery County, PA (-32.1%) and Warren, MI (-32.1%). 

Second homes are most common in Florida

Second-home mortgages made up the largest share of all mortgage originations in West Palm Beach, FL, a popular destination for snowbirds and vacationers, in 2023. Just under 7% of all mortgage originations in the West Palm Beach metro last year were for second homes. Next come Orlando, FL (4.1%), Riverside, CA (4%), New Brunswick, NJ (3.9%) and Tampa, FL (3.6%). Even though the share of second-home mortgages was largest in those places of all the major U.S. metros, they were still down at least 37% year over year. 

On the other end of the spectrum, second-home mortgages made up a miniscule share (about 0.5%) of total mortgages in Detroit, Montgomery County, PA, Oakland, CA, Cleveland and Dallas. 

Metro-level summary: Mortgages for second homes, 2023

50 most populous U.S. metros

U.S. metro area  Second-home mortgage originations Second-home mortgage originations, YoY change Share of total mortgage originations that were for second homes Median value of second homes
Anaheim, CA 444 -36.7% 2.9% $1,335,000
Atlanta, GA 734 -45.2% 1.0% $435,000
Austin, TX 388 -62.5% 1.1% $495,000
Baltimore, MD 222 -45.6% 0.8% $515,000
Boston, MA 428 -43.9% 1.2% $805,000
Charlotte, NC 454 -42.5% 1.2% $445,000
Chicago, IL 448 -48.4% 0.7% $365,000
Cincinnati, OH 181 -41.8% 0.7% $325,000
Cleveland, OH 119 -39.3% 0.6% $225,000
Columbus, OH 212 -41.3% 0.9% $420,000
Dallas, TX 447 -45.9% 0.6% $485,000
Denver, CO 514 -36.2% 1.3% $675,000
Detroit, MI 73 -32.4% 0.5% $245,000
Fort Lauderdale, FL 679 -47.0% 3.5% $445,000
Fort Worth, TX 215 -45.6% 0.7% $435,000
Houston, TX 1114 -47.5% 1.4% $405,000
Indianapolis, IN 254 -32.4% 0.9% $325,000
Jacksonville, FL 680 -43.7% 2.7% $475,000
Kansas City, MO 206 -31.1% 0.8% $335,000
Las Vegas, NV 877 -49.6% 3.1% $455,000
Los Angeles, CA 512 -51.1% 1.3% $1,305,000
Miami, FL 602 -46.2% 3.1% $715,000
Milwaukee, WI 145 -45.7% 1.0% $355,000
Minneapolis, MN 393 -38.1% 0.9% $420,000
Montgomery County, PA 91 -32.1% 0.5% $510,000
Nashville, TN 394 -51.3% 1.4% $510,000
Nassau County, NY 600 -43.6% 2.8% $1,725,000
New Brunswick, NJ 858 -45.4% 3.9% $885,000
New York, NY 865 -53.9% 1.8% $985,000
Newark, NJ 280 -37.5% 1.6% $375,000
Oakland, CA 99 -50.5% 0.5% $995,000
Orlando, FL 1483 -36.9% 4.1% $445,000
Philadelphia, PA 124 -50.2% 0.7% $355,000
Phoenix, AZ 2001 -46.5% 3.2% $535,000
Pittsburgh, PA 181 -38.2% 0.9% $285,000
Portland, OR 258 -50.0% 1.1% $605,000
Providence, RI 363 -31.1% 2.7% $775,000
Riverside, CA 1566 -47.1% 4.0% $655,000
Sacramento, CA 455 -48.8% 2.1% $805,000
San Antonio, TX 438 -51.1% 1.3% $335,000
San Diego, CA 411 -45.4% 2.1% $1,115,000
San Francisco, CA 112 -57.6% 1.6% $1,355,000
San Jose, CA 69 -35.5% 0.7% $1,300,000
Seattle, WA 239 -53.0% 0.8% $795,000
St. Louis, MO 303 -25.2% 0.9% $315,000
Tampa, FL 1618 -41.5% 3.6% $425,000
Virginia Beach, VA 415 -47.5% 1.8% $525,000
Warren, MI 281 -32.1% 1.0% $325,000
Washington, DC 436 -46.1% 0.9% $655,000
West Palm Beach, FL 1081 -37.0% 6.6% $635,000


The 2023 data in this report is from a Redfin analysis of Home Mortgage Disclosure Act (HMDA) data covering purchases of second homes, primary homes and investment properties from 2018-2023. The term “vacation home” is used interchangeably with “second home” in this report. For this report, the median “worth” or “value” of second homes is the median property value from HMDA data itself, which is reported by the mortgage loan originator as either the home’s appraised value or sale price. 

The 2024 data in this report is from a Redfin analysis of mortgage-rate lock data from real estate analytics firm Optimal Blue. Redfin created a seasonally adjusted index of Optimal Blue’s data to adjust for typical seasonal patterns and allow for simple comparisons of second-home demand before, during and after the pandemic. We define “pre-pandemic” as January and February 2020 and set the index for that period to 100. This data is subject to revision. A mortgage-rate lock is an agreement between a homebuyer and a lender that allows the homebuyer to lock in an interest rate on a mortgage for a certain period of time, offering protection against future interest-rate hikes. Homebuyers must specify whether they are applying to secure a mortgage rate for a primary home, a second home or an investment property. Roughly 80% of mortgage-rate locks result in actual home purchases. 

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