Vacation homes—also referred to as second homes or seasonal properties—are residential properties purchased primarily for leisure use rather than as a primary residence. While often associated with affluent buyers and resort destinations, this segment of the housing market can serve as a leading indicator of broader economic conditions. Because these purchases are typically discretionary, shifts in vacation-home demand can signal changes in consumer confidence, housing affordability, and the financial flexibility of higher-income households—factors that also influence the wider real estate market and local economies that depend on seasonal residents.
In recent years, higher mortgage rates, elevated home prices, and tighter financial conditions have made second-home purchases more difficult to sustain, particularly compared with the low-rate environment earlier in the decade. As a result, many prospective buyers are turning toward alternatives such as timeshares and short-term rentals, which offer access to vacation properties without the high upfront costs and unpredictable overhead of owning a vacation home.
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