Americans Took Out 86,600 Mortgages for Second Homes Last Year, Lowest Since 2018

Florida accounted for all top five metro areas with the largest declines in these types of mortgage originations.

A home for sale in Arlington, Va., on Aug. 22, 2023. Andrew Caballero-Reynolds/AFP via Getty Images

United States homebuyers took out 86,604 mortgages in 2024 to purchase second homes, down 5 percent from the previous year amid high prices and elevated mortgage rates, real estate brokerage Redfin said in a May 8 statement.

Last year’s mortgage numbers for second homes were “the lowest level in records dating back to 2018,”  the company said. These mortgages “made up just 2.6 percent of all mortgages in 2024—the lowest share on record. That’s down from 2.8 percent the year before and a peak of 5 percent in 2020,” it said.

“Demand for second homes fell more than demand for primary homes; mortgages for primary homes fell by 1.4 percent year over year, less than half the decline in mortgages for second homes.”

Demand for these properties fell the fastest in Florida metros. In Miami, second-home mortgage originations fell by 32.2 percent last year, the largest among all major U.S. metros. Mortgage origination refers to when a lender creates a home loan.

Miami was followed by Orlando, Fort Lauderdale, West Palm Beach, and Tampa, all in Florida.

Redfin attributed the faster decline in mortgages for second homes to various factors, such as overall inflation and the prices of these homes now being significantly more expensive than primary homes

These properties, bought for purposes such as investments and vacation, had a median value of $495,000 last year, higher by more than $100,000 than the $385,000 for primary homes, said the brokerage.

The average weekly rate for a 30-year fixed-rate mortgage clocked above the 6 percent level for every single week last year, making mortgages an expensive option.

In 2020, the average weekly rate was below 4 percent, even hovering below 3 percent in some weeks.

Second home mortgage numbers could rise this year if home values were to drop to a level at which such properties will once again become an attractive investment.

An indication of this came in March, when home values flattened as more sellers than buyers entered the market, according to an April 17 report from real estate marketplace Zillow.

“With more options available, competition cooled, and home price growth slowed significantly,” it said.

“Sellers cut prices at record rates. Approximately 23 percent of the listings on Zillow received a price cut in March, the highest share for any March since at least 2018.”

Construction Sector

Confidence in the market for newly built multifamily housing fell in the first quarter of 2025 on an annual basis, the National Association of Home Builders (NAHB) said in a May 8 statement.

The association’s Multifamily Production Index, which measures builder and developer sentiment, was at 44 in the first quarter of 2025, down 3 points from the same quarter in 2024.

“While occupancy in existing buildings remains strong, multifamily developers are remaining cautious about starting new projects, especially mid/high-rise and condominium projects,” said Debra Guerrero, chairman of NAHB’s Multifamily Council.

“Construction costs, regulatory barriers, and financing are the main headwinds right now, with some developers also citing uncertainty about tariffs as a reason to be cautious.”

The Trump administration has taken action to ease the pressure on the construction sector.

For instance, the government has exempted both Canada and Mexico from the baseline 10 percent tariffs on imports, a decision welcomed by NAHB. This exemption is crucial since both countries are key suppliers to America’s construction sector. Canada accounts for around 85 percent of all American softwood lumber imports, while Mexico provides gypsum and concrete.

Meanwhile, the 12-month shelter inflation rate has declined every single month during the first quarter of this year.

In January, shelter inflation was 4.4 percent, down from 4.6 percent in December. This further dipped to 4.2 percent in February and to 4 percent in March.

The construction sector has been adding jobs in recent months. In April, the sector added 11,000 new jobs, which followed 7,000 job additions in March and 12,000 in February, according to data from the Bureau of Labor Statistics.