Only 13.8% of U.S. Families Own a Second Home or Other Residential Property, and the Typical One Is Valued at $280,000

A cabin by the lake can seem ideal—until the roof needs work, the insurance arrives, and taxes become part of the equation. Before making a purchase, one question may help you decide whether a second home is a dream or a burden.

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Plenty of people imagine owning a beach condo or a lakeside retreat, but relatively few do. Federal Reserve survey data shows that 13.8% of American families owned residential property beyond their primary residence in 2025, up from 12.9% in 2022. That still makes second-home ownership uncommon, though it is gradually becoming more widespread.

The measure is broader than vacation homes alone. It also includes rental houses, leased-out condos, and any other residential real estate a family owns but does not occupy full time.

For the families who do own such property, the median value climbed from $246,200 in 2022 to $280,000 in 2025, a gain of 14%. Because these amounts are stated in 2025 dollars, the increase reflects growth after inflation.

What the $280,000 Median Actually Shows

The median is the middle figure. If all owners are arranged from the least expensive property to the most expensive, the median sits in the center. In this case, it is more useful than the average, since a small number of luxury beachfront estates could push the average much higher while most cabins remain far more modest.

In practical terms, half of the families with other residential property report combined holdings below $280,000, and half report more. That total refers to the value of all property in this category together, not the price of a single vacation house.

Home prices rising over the period helped boost real-estate values. The Federal Reserve says its broader home-price benchmark rose 12% between the 2022 and 2025 surveys. More recently, the Case-Shiller national index showed prices up 2.1% year over year in August 2026, though that pace lagged inflation.

Who Owns the Extra Homes

The Fed’s Distributional Financial Accounts track real-estate wealth, including investment and vacation properties, across wealth groups. In the second quarter of 2026, households in the top 10% held 43.7% of it.

By contrast, the bottom half held only 9.7%, down from 11.5% in late 2015. Extra property tends to accumulate among families that already have substantial wealth, since buying a second place usually requires money left over after the first home is secure.

The Ongoing Costs After Closing

A second property brings more than a purchase price. It also comes with another property tax bill, another insurance policy, and another round of repairs.

Roofs, furnaces, and plumbing wear out even when the house sits empty. Then there is the travel expense—gas, flights, and the time needed to get there. In retirement, those costs are paid from a fixed income, without a paycheck to offset them.

Some owners try to offset expenses by renting. Our earlier piece on the Augusta rule explains a tax-code exception: if a home used as a residence is rented for fewer than 15 days in a year, that rental income is not included in taxable income.

But rental expenses cannot be deducted either. Our coverage of renting out rooms and backyard cottages examines other ways homeowners can earn money from space they already have.

Why Taxes Treat a Second Home Differently

The main home gets the largest sale-tax break. Federal law allows homeowners to exclude gains on a sale if they owned the property and used it as their principal residence for at least two of the previous five years.

The exclusion limit is $250,000, or $500,000 for married couples filing jointly. IRS guidance says using a property as a second home can disqualify it from the full exclusion, so profit from selling a vacation home is generally taxed as a capital gain (IRS Publication 523).

Rental property adds one more rule: depreciation. If you claimed annual deductions for wear and tear, the IRS requires depreciation recapture when you sell. That means the depreciation you deducted becomes taxable income again, and the home-sale exclusion does not shield that portion of the gain (26 U.S.C. § 121(d)(6)).

One tax benefit applies to nearly any property: the step-up in basis at death. Heirs generally inherit property at its fair market value on the date of death. In tax terms, decades of gains can disappear, a subject covered in detail in our reporting on inherited homes.

Why Retirees Should Be Cautious

Homes are slow and costly to sell. Existing home sales were running at a 3.99 million annualized pace in September 2026, which indicates a soft market. For retirees with most of their savings tied up in a cabin, there is no easy way to liquidate just a small portion if a car breaks down or a medical bill arrives.

Anyone who would have little cash left after buying should think carefully before locking money into property that is difficult to sell.

The Question to Ask Before You Buy

The Fed’s data shows second homes are becoming a little more common and a little more valuable, but it cannot tell any single household whether ownership makes sense. Before signing anything, ask one question: would I still want this place if I could use it only half as often?

If the answer is yes, then the taxes, upkeep, and travel may seem worthwhile. If the answer is no, renting a cabin for a few weeks each year may provide the getaway without the ongoing bills.