WASHINGTON — Mortgage originations for second homes increased 4.1% in 2025, marking the first annual gain since the vacation-home buying boom of the COVID-19 pandemic, according to reporting by National Mortgage Professional, citing an analysis of Home Mortgage Disclosure Act data by Redfin.
The increase outpaced growth in mortgages for primary residences, which rose just 1% during the year, highlighting how affluent buyers continue to drive activity in the housing market while affordability challenges sideline many prospective homeowners.
According to the report, 85% of second-home mortgages originated in 2025 went to high-income borrowers with a median household income of approximately $294,000, more than three times the U.S. median household income of about $88,000. The typical second home financed last year carried a value of $515,000, compared with $395,000 for a primary residence.
Well-Below Pandemic Highs
Despite the increase, vacation-home lending remains well below pandemic highs. Second-home mortgages accounted for 2.7% of all mortgage originations in 2025, up slightly from 2.6% in 2024 but far below the 5.1% share recorded in 2021.
The market had contracted sharply after the pandemic, with second-home mortgage originations falling 42% in 2022 and another 40% in 2023. By 2024, demand had reached its lowest level in nearly a decade before rebounding modestly last year.
Redfin Chief Economist of Research Chen Zhao said the current market differs significantly from the pandemic-driven surge.
“Vacation homes are making a modest comeback, but it’s a very different market than it was during the pandemic,” Zhao said in the report. “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. 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.”
Demand Increases in Most Major Markets
National Mortgage Professional reported that demand increased in 35 of the nation’s 50 largest metropolitan areas. Montgomery County, Pa., recorded the largest annual increase in second-home mortgage originations at 28.8%, followed by Indianapolis at 26.6%. Las Vegas posted the largest decline, with originations falling 20.9%, while Los Angeles experienced a 19.8% decrease.
The report also found that more than 81% of vacation-home mortgages went to white borrowers, while nearly 59% were originated to buyers between the ages of 45 and 64, making Generation X the dominant demographic in the market.
West Palm Leads Nation
West Palm Beach, Fla., led the nation’s major metropolitan areas, with second-home mortgages accounting for just under 6% of all mortgage originations in 2025, reflecting the area’s popularity among seasonal residents and luxury-home buyers.
The New Brunswick, N.J., metropolitan area, which includes much of the Jersey Shore, ranked second with a 4.6% share of mortgage originations, followed by the Riverside, Calif., metropolitan area, which includes Palm Springs, at 3.8%. All three markets posted year-over-year gains, with New Brunswick recording the largest increase at 13%, according to the report.
National Mortgage Professional said Redfin’s findings also reflect growing interest from affluent domestic and international buyers, as wealth continues to flow into the U.S. luxury housing market, helping sustain demand for vacation properties despite elevated mortgage rates and ongoing affordability pressures.
