Vacation Homes Are Not as Popular as They Used to Be
Those looking for a vacation home nowadays won't have much competition when buying one. As of 2024, vacation home purchases were down to 86,604, the lowest they have been since 2018. In 2018 and 2019, the purchase of vacation homes hovered around nearly 180,000. However, this number rose exponentially in 2020 and 2021 to 229,199 and 258,289, respectively, according to a recent chart compiled by Redfin analyzing data from the Home Mortgage Disclosure Act (HMDA).
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The interest in vacation homes isn't as strong as it was in 2020 and 2021 because of the trend toward returning to work and high home costs. Affluent homebuyers took advantage of the low interest rates then to buy these homes. Also, since so many work-from-home opportunities existed in 2020 and 2021, buyers opted to purchase vacation homes to perform such work.Since some companies are requiring employees to return to work and home interest rates continue to hover around 6.99%, this downward trend doesn't seem likely to end anytime soon. This is primarily because inflation has taken many households' discretionary funds, and vacation homes are becoming more expensive than primary homes.
As with other unnecessary expenses, people are opting to cut back on second homes, which are more of a luxury nowadays. Add to this the skyrocketing insurance costs, especially in popular vacation areas near waterfronts in Florida, which are keeping potential buyers at bay.
Those who purchased such properties to benefit from Airbnb revenues aren't faring well, either. Occupancy for Airbnb property rentals is down, so investors aren't seeing the returns they did in previous years. The lack of interest in such rental properties may encourage many owners to relinquish them, which could cause an avalanche of inventory to become available in areas where this market is saturated. If this surge happens, this could be good news for home buyers anxiously waiting for costs to drop before purchasing.Vacation Homes Are Not as Popular as They Used to Be first appeared on Dengarden on May 27, 2025
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