Jeff Vasishta
4 min read
In This Article:
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If you’re looking for a vacation rental this summer, you might have to look harder than you’re used to.
According to data from real estate brokerage Redfin, vacation homes are no longer a must-have item for American homeowners looking for a scenic escape or the chance to earn extra income from a real estate side hustle. In fact, the number of vacation rental owners has dropped precipitously to the lowest level since records began in 2018.
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Redfin’s Home Mortgage Disclosure Act analysis shows that 86,604 homebuyers took out mortgages in 2024, a 5% drop from the previous year. Amongst the primary reasons for the fall were:
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High interest rates
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High home prices
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Return to office mandates
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A drop in the rental market
“Most people aren’t buying vacation homes at all because mortgage rates and insurance costs – especially for waterfront homes and condos–have skyrocketed. Plus, people know they’re unlikely to earn much revenue from listing on Airbnb now that occupancy rates are down,” Lindsay Garcia, a Redfin Premier agent in Fort Lauderdale, Florida, said on the company's website. “While some wealthy cash buyers are still purchasing second homes, they are much more likely to make a low-ball offer or request concessions than they used to be.”
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Data shows the demand for vacation rentals is falling fastest in Florida, where soaring insurance costs, homeowners association fees, and taxes amid extreme weather have fueled a mass sell-off. However, it’s not just the Sunshine State where people are opting against buying vacation rentals. Mortgage numbers for second homes have fallen in 30 of the 50 most populous U.S. metros, according to Redfin. Unsurprisingly, most vacation homes across the country were purchased by baby boomers who had both the cash and the time to enjoy their properties.
Real estate agents and mortgage brokers who may have been looking forward to an increase in vacation rental sales this spring have been disappointed. According to The Wall Street Journal, fears about high interest rates have been exacerbated by tariff talk, causing the stock market to slide and buyers to hit pause on real estate purchases.
