According to Redfin News analysis of federal mortgage data, second-home purchases are showing signs of life after several years of decline. The number of vacation-home mortgages grew by 4.1% in 2025 compared to the year before, marking the first annual increase in four years since the pandemic-era peak back in 2021. In contrast, mortgages for primary residences only ticked up 1% year over year, so second homes are actually outpacing growth in primary home purchases right now.
The story here is really about who's buying these properties. The vacation-home market is being driven almost entirely by affluent buyers who have the financial cushion to make discretionary purchases even when housing costs are sky-high. About 85% of second-home mortgages in 2025 went to high earners with a median income just under $300,000, compared to the overall U.S. household median of $88,000. The typical second home selling for around $515,000 versus $395,000 for primary homes tells you these aren't modest getaways.
When you look at who's buying, the demographics are striking. More than four in five vacation-home buyers are white, while Hispanic, Asian, and Black buyers each account for much smaller shares. Generation X dominates the second-home market, with nearly one-third of mortgages going to folks aged 55 to 64, and another 27.6% to those aged 45 to 54.
Geographically, second-home purchasing is concentrated in predictable vacation destinations. West Palm Beach leads the country with nearly 6% of all mortgages there going to second homes, followed by the Jersey Shore and the Palm Springs area in Southern California. Meanwhile, Oakland and Montgomery County, Pennsylvania saw the lowest rates of vacation-home purchases at just 0.5% of all mortgages.
What I am seeing locally in the Bay Area is consistent with this national trend. Oakland's low percentage of second-home mortgages reflects the reality that most folks here are stretched thin just trying to hold onto their primary residence. The Fremont and broader East Bay market shows similar patterns, where buyers are focused on primary home ownership. The vacation-home market remains a luxury playground for those with substantial means, and for average buyers in our region, that's a distant consideration while primary home affordability remains so challenging.
