U.S. cities where vacation home demand is falling fastest

The vacation-home boom did not just cool off. In some U.S. cities, it fell off a cliff.

A new analysis of federal mortgage data shows vacation-home demand has dropped sharply since the pandemic buying rush, with some of the country’s biggest short-term rental and second-home markets seeing the steepest declines, as reported by “Community Newspaper Group.”

U.S. vacation-home purchases using a mortgage fell from 257,549 in 2021 to 88,158 in 2025, according to an analysis of Home Mortgage Disclosure Act data,

That is a 65.8 percent decline.

The vacation-home share of all mortgage originations also dropped from 4.9 percent in 2021 to 2.6 percent in 2025.

Many of the places where vacation-home demand has pulled back hardest are also markets where investors chased second homes, beach houses, mountain cabins and Airbnb-ready properties during the pandemic.

Here are the cities where vacation home demand is falling the fastest.

Austin, Las Vegas and Orlando saw major vacation-home demand drops

Among large U.S. metros, Austin saw the steepest decline in vacation-home purchases, with demand falling 80.4 percent from 2021 to 2025, according to the analysis.

Las Vegas and Orlando were close behind, with each market down 79.4 percent.

Miami followed with a 78.8 percent drop.

That list is not random.

Austin, Las Vegas, Orlando and Miami all became high-profile investor targets during the pandemic-era real estate run-up, when low mortgage rates, remote work and rising travel demand pushed more buyers into leisure-friendly markets.

Now, higher borrowing costs and elevated home prices are making those deals harder to justify.

A property that worked on a spreadsheet in 2021 may look very different with today’s financing costs, insurance premiums and local short-term rental rules.

Related: Lodgify CEO says low-effort STR hosting is no longer enough

Florida saw the biggest raw decline in vacation-home purchases

At the state level, Florida recorded the largest drop by total volume.

The state had 38,465 fewer vacation-home purchases with a mortgage between 2021 and 2025, more than any other state in the analysis.

California followed with 13,516 fewer purchases, while Texas dropped by 9,900 and North Carolina fell by 9,575.

On a percentage basis, Nevada had the sharpest statewide decline at 78.3 percent. Hawaii was next at 77.8 percent, followed by Wyoming at 74.5 percent.

Those declines show how broad the pullback has become.

It is showing up in Sun Belt markets, coastal states, mountain destinations and tourism-heavy metros.

Vacation destinations were hit hard, too

The slowdown was not limited to big metros.

Several well-known vacation destinations also saw steep declines in second-home mortgage activity, including Kahului, Hawaii, with an 85.2 percent drop, Naples, Florida, with a 76.1 percent drop, and Breckenridge, Colorado, at 63.9 percent.

That matters because these are the types of places where vacation homes are often evaluated as both lifestyle purchases and income-producing assets.

When buyer demand pulls back in those markets, it can affect acquisition pricing, resale expectations and how much room investors have for error.

The good news for STR operators is simple.

If fewer people are rushing to buy the dream vacation house, investors have more opportunities to find better entry points. On the flipside, it means the exit door may not be as crowded when it is time to sell.

Why this matters for STR investors

For short-term rental investors, falling vacation-home demand is not automatically bad news.

Less buyer competition can create opportunities, especially for investors with cash, strong financing or the patience to wait for better pricing. Markets that were nearly impossible to enter during the 2021 buying frenzy may now have more breathing room.

But the risk side is just as important.

If demand from traditional second-home buyers is weaker, investors need to be more careful about resale value.

A short-term rental that depends on optimistic appreciation, loose regulation or perfect occupancy assumptions is a much tougher bet in this market.

The better play is discipline.

That means underwriting with today’s mortgage rates, today’s insurance costs, today’s local regulations and realistic STR revenue numbers.

The pandemic vacation-home gold rush is over.

The buyers still showing up now need the math to work.