Spring has brought a renewed sense of optimism to the U.S. housing market, especially for those eyeing vacation and second homes. Buyers and sellers are seeing encouraging trends, from stabilizing prices to evolving ownership opportunities. Here’s a closer look at the factors shaping the second half of 2025 and why the outlook is sunnier than you might think.
1. A brighter spring for homebuyers
After a turbulent few years, the national housing landscape is showing signs of stability. According to Business Insider, mortgage rates have ticked down from their peak, hovering around the mid-6% range. This, combined with slowing home price growth, is improving affordability. Inventory is also up. We’re seeing a 33% increase in homes on the market since last year, according to Housingwire, giving buyers more options and negotiating power as more listings hit the market. Importantly, demand for second homes has normalized to more sustainable levels after the buying frenzy seen during the pandemic.These signals indicate a market that is rebalancing in favor of buyers, without the doom-and-gloom of a crash. Economists are even predicting further relief on the horizon, with mortgage rates expected to gradually ease later in 2025 per Business Insider.
2. Flexibility fuels new buying behaviors
The way Americans buy and use second homes is also evolving, driven by more flexible lifestyles and innovative ownership models. Remote work continues to be a game-changer allowing people to travel more freely and even work from their vacation properties. Thanks to these "workcations," professionals are extending their stays at second homes, blending work and leisure.Another behavioral shift can be seen in how vacation homes are purchased. High prices have led to models like co-ownership which is becoming an increasingly common way for people to buy a vacation home. One recent Zillow survey found that 15% of buyers purchased a home with a friend or relative, rather than solo. The momentum behind this trend is growing, and it's likely to continue as buyers seek smarter, more flexible ways to own their vacation home.
3. Vacation home dreams go global
America's second-home buyers aren't just limiting their search to the fifty states – international vacation homes are increasingly on the radar in 2025. With the U.S. dollar remaining strong and remote work enabling longer getaways, more Americans are deciding that their piece of paradise might just lie overseas. Destinations like Mexico, Spain, Portugal, Italy and Greece are seeing increased demand from the U.S., contributing to record international sales for many European real estate agencies.
Looking ahead: opportunity knocks
As we head into summer 2025, the overall outlook for the second-home market is upbeat and forward-looking. While challenges like higher interest rates and economic uncertainty haven't vanished, the market has shown remarkable resilience and adaptability – a key factor in the continued success of Pacaso. If you have questions about a specific market or are interested in exploring co-ownership opportunities, don’t hesitate to reach out.
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