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Vacation Homes Are Recovering. The Housing Market Isn't
A Rebound That Looks Bigger Than It Is
Vacation-home mortgages rose 4% in 2025, their first annual increase since the pandemic boom ended. Primary-home mortgages increased just 1%.
That sounds like momentum. But the comparison is misleading. Vacation-home demand had collapsed over the previous three years, so even a small improvement was enough to produce positive growth. Second homes still make up only about 3% of all mortgages—roughly half their share at the 2021 peak.
The Market Has Narrowed
The buyers coming back are largely the ones who can afford to ignore high rates and expensive housing.
About 85% of vacation-home mortgages went to high-income households, with a median income near $300,000. The typical second home also costs significantly more than the typical primary residence, reinforcing that this is increasingly a luxury market rather than a broad consumer trend.
The Pandemic Tailwind Is Gone
The conditions that made second homes unusually attractive have faded.
More people are returning to the office, making seasonal living less practical. Short-term rentals are less profitable than they were a few years ago. Mortgage rates remain high. Buying a second property has gone back to being what it usually was: a discretionary purchase rather than a clever financial strategy.
The Numbers Need Perspective
Vacation-home lending increased across most major metro areas, but many of the biggest percentage gains came from places where second-home purchases remain rare.
At the same time, the largest concentrations are still clustered around established wealth destinations like West Palm Beach, the Jersey Shore, and Palm Springs. The map hasn't changed much. The activity has simply picked up around the edges.
What This Really Signals
This isn't the return of the pandemic vacation-home boom.
Instead, it's a reminder that today's housing market is behaving differently depending on who you are. Affluent buyers have started moving again, while many households are still struggling to buy their first home.
The luxury end of the market is finding its footing, while the broader housing market remains constrained. Whether that gap continues to widen remains the more interesting question.
International Real Estate Still Runs on Referrals
The Signal Beneath the Numbers
The international real estate market is getting smaller. Fewer agents are working with foreign buyers, fewer transactions are closing, and total spending has fallen sharply.
But one thing hasn't changed: the deals that still happen rarely begin with a click. They begin with a conversation.
Nearly two-thirds of international buyer leads come through personal relationships—past clients, referrals, and existing business networks. Websites, SEO, and paid advertising account for a much smaller share.
The Funnel Is Narrowing
The market isn't just slowing; it's becoming harder to convert.
Many international buyers walk away before purchasing. Some can't find suitable inventory. Others run into affordability limits or immigration hurdles. A weaker dollar, which should have made U.S. property more attractive, hasn't been enough to reverse the trend.
Better economics aren't overcoming weaker confidence or greater friction.
What Changes
When demand contracts, marketing usually gets louder.
Instead, this market appears to reward trust over visibility.
That doesn't mean digital marketing has stopped mattering. It means it's doing less of the heavy lifting than many assume. In uncertain markets, people making expensive cross-border decisions seem more willing to rely on someone recommended by someone they already know than someone they found online.
Relationships aren't replacing marketing—they're becoming the filter through which marketing matters.
For agents, the competitive advantage may no longer be who generates the most leads. It may be who has spent years quietly building a network that still picks up the phone when the market doesn't.
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The New Goal Isn't to Teach. It's to Be Remembered
Attention Has Replaced Production
The advice isn't to abandon talking-head videos. It's to abandon the assumption that polished production is what makes them work.
Platforms increasingly reward attention over production effort. A Reel succeeds if it stops someone scrolling, keeps them watching, and gets shared or saved. Good lighting and clear audio still matter—but mostly because poor execution creates reasons to leave.
Quality has become the minimum requirement, not the competitive edge.
Stop Marketing to the Smallest Audience
Many agents create content for people actively buying or selling a home. The problem is that almost nobody is doing that on any given day.
Instead, the recommendation is to create content that locals enjoy, newcomers find useful, and future clients remember. Community stories, neighborhood insights, and practical observations have a longer shelf life than another explanation of mortgage rates.
Paradoxically, reaching fewer "qualified" viewers today may mean reaching more clients tomorrow.
One Idea Is Usually Enough
The suggested formula is intentionally simple: capture attention, make one point, then ask for one action.
That restraint matters. Multiple lessons and multiple calls to action often compete with each other rather than reinforce each other. Simplicity isn't just easier to consume—it may also be easier to remember. Clarity often beats completeness.
The strongest ideas aren't necessarily the most educational. They're the ones people feel compelled to send to someone else.
Specific advice, surprising local insights, or practical solutions tend to travel further than generic lists or broad market commentary. The question shifts from "Is this valuable?" to "Is this worth sharing?" Those aren't always the same thing.
Consistency Comes From Process
The operational advice is straightforward: batch content, keep equipment simple, edit aggressively, and shorten videos.
Less time spent setting up means more time publishing. And shorter videos tend to outperform not because they're inherently better, but because finishing one has become increasingly rare.
The final test is also the hardest: if the video doesn't sound like you, it probably won't build trust. Authenticity has become a cliché—but audiences still seem unusually good at detecting when it's missing.
The House That Tries to Keep You Outside
Listed for $39.5 million in Dorado, Puerto Rico, most homes are designed around the rooms inside them.
This one seems designed around all the reasons to leave them.
From outdoor showers and private terraces to a rooftop kitchen, glass jacuzzi, infinity pool, and multiple open-air lounges, almost every highlight happens under the sky.
When the weather is perfect year-round, the most valuable square footage may not have a roof at all.
Check it out👇
TL;DR (Too Long; Didn’t Read)
Vacation-home lending has finally returned to growth, but the rebound says more about affluent buyers than about a broad housing recovery. Demand remains concentrated among high-income households, while the wider market continues to struggle with high borrowing costs and affordability constraints. In international real estate, a shrinking market is making personal relationships even more valuable, with referrals continuing to outperform websites and paid marketing as trust becomes a greater competitive advantage. Meanwhile, for agents trying to reach those clients online, the playbook for social media is also shifting: polished production is no longer the differentiator. Instead, platforms increasingly reward content that captures attention quickly, earns shares, and stays memorable, suggesting that authenticity, focus, and relevance now matter more than high-end production or traditional sales messaging
Have a great weekend - we’ll see you next Saturday.
Cheers 🍻
-Market Minds Team
The content of Market Minds is provided for informational purposes only and reflects personal opinions based on sources believed to be reliable. It does not constitute financial, investment, legal, or professional advice. Each reader is solely responsible for their own decisions.