Only 13.8% of U.S. Families Own a Second Home or Other Residential Property, With a Typical Value of $280,000

Quick Read

• Owning a second home is still uncommon, though it is becoming more widespread: 14% of American families held non-primary residential property in 2025, compared with 13% in 2022.

• The median value of those properties rose 14% after inflation to $280,000, and the richest 10% of households own 44% of this real estate.

• Second homes bring ongoing costs such as taxes, insurance, and upkeep, can reduce tax benefits on a main-home sale, and may be difficult to unload, so retirees should consider the trade-offs carefully.

Plenty of people imagine owning a cabin on a lake or a condo by the beach, but far fewer actually do. The Federal Reserve’s Survey of Consumer Finances found that 13.8% of American families owned residential property besides their primary home in 2025, up from 12.9% in 2022. That means second-home ownership remains relatively uncommon, even if it is gradually expanding.

The figure is broader than just vacation homes. It also includes rental houses, leased-out condos, and other residential property a family owns but does not occupy full time.

For households that do own this kind of 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 midpoint value. If all owners are arranged from the least expensive property to the most expensive, the median is the one in the middle. In this case, it is a better measure than the average because a small number of expensive beachfront homes can skew the average upward while most properties remain more modest.

In practical terms, half of the families with other residential property report holdings worth less than $280,000, while the other half report more. That number reflects the combined value of those holdings, not the price of a single vacation home.

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Rising home prices also helped push real estate values higher during the period. The Federal Reserve says its broader measure of home prices increased 12% between the 2022 and 2025 surveys. More recently, the Case-Shiller national index showed prices rising another 2.1% year over year in August 2026, although that pace was still below inflation.

Who Owns the Extra Homes

The Federal Reserve’s Distributional Financial Accounts measure real estate wealth, including investment and vacation properties, across wealth groups. In the second quarter of 2026, the top 10% of households controlled 43.7% of that wealth.

By contrast, the bottom half held just 9.7%, down from 11.5% in late 2015. Extra property ownership tends to be concentrated among families that already have substantial wealth, since buying a second place usually requires cash left over after the main home is paid for.

The Expenses That Continue After Closing

A second property comes with costs beyond the purchase price: another property tax bill, another insurance policy, and another set of repairs.

Roofs, furnaces, and plumbing wear out whether anyone is there or not, and travel adds more expense through gas, flights, and the time required to get there. In retirement, those bills have to come out of a fixed income, without a paycheck to offset them.

Some owners offset part of the cost by renting out the property. A tax rule known as the Augusta rule allows a home used as a residence to be rented for fewer than 15 days in a year without that rental income being taxable.

However, rental expenses cannot be deducted in that situation either. Other ways homeowners generate income from space they already own include renting out rooms or backyard cottages.

Why Tax Rules Treat a Second Home Differently

The main home sale tax exclusion applies to your primary residence. Under federal law, you can exclude profit from the sale if you owned and lived in the home as your 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 that using a property as a second home can keep it from qualifying for the full exclusion, so gains from selling a vacation home are usually taxed as capital gains.

Rental property creates another tax issue: if you claimed depreciation, the IRS requires that deduction to be “recaptured” when you sell. In other words, the depreciation you previously deducted becomes taxable again, and the home-sale exclusion does not shield that portion of the gain.

One tax advantage applies to nearly all property: the step-up in basis at death. Heirs generally receive the property at its fair market value on the date of death, which can erase decades of gains for tax purposes.

Retirees Who Should Pause Before Buying

Homes are slow and costly to sell. Existing home sales were running at a 3.99 million annualized pace in September 2026, a sign of a soft market. If most of a retiree’s wealth is tied up in a cabin, there is no easy way to sell just a small portion when a car breaks down or a medical bill arrives.

Anyone who would have little cash left after buying should think carefully before putting that money into property that can be hard to sell.

One Question to Ask Before You Buy

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

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

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