The surge in vacation-home buying that swept across the country during the COVID-19 pandemic has largely come to an end, and the Chattanooga area is no exception.
A new analysis by SellMyTimeshareNow found that vacation-home purchases financed with mortgages nationwide have fallen nearly 66 percent since their pandemic-era peak in 2021. The report shows purchases dropping from 257,549 in 2021 to just 88,158 in 2025, signaling a dramatic reversal in the second-home market.
In the Chattanooga, Tennessee-Georgia metropolitan area, vacation-home purchases declined 63 percent between 2021 and 2025, reflecting a slowdown similar to national trends. The Chattanooga metro ranked 67th among midsize metropolitan areas for the largest decline in vacation-home demand and 413th among all 897 metropolitan and micropolitan areas included in the study.
According to the report, approximately 1.3 percent of housing units in the Chattanooga metro are used seasonally, recreationally, or occasionally. Despite the downturn, vacation homes still accounted for 1.9 percent of all mortgage originations in the area during 2025, with the median value of a mortgaged vacation home reaching $450,000.
Housing analysts say the decline reflects a combination of higher mortgage rates, elevated home prices, economic uncertainty, and changing workplace trends. During the pandemic, low interest rates and widespread remote work fueled a rush toward vacation destinations and second-home purchases. As those conditions faded, demand followed suit.
Vacation home purchases fell by nearly two-thirds from 2021 to 2025 amid soaring prices and mortgage rates
Industry observers also point to a cooling short-term rental market and increased regulations on vacation rentals in some communities as factors reducing the appeal of second-home ownership. Additionally, many employers have moved workers back into offices, eliminating some of the flexibility that allowed people to spend extended periods in vacation properties during the pandemic years.
Nationally, vacation-home demand has fallen to its lowest level in data going back to at least 2018. Redfin reported that buyers took out approximately 86,600 mortgages for second homes in 2024, the lowest level recorded in the past six years. Vacation-home mortgages now account for just 2.6 percent of all mortgages nationwide, down significantly from pandemic-era highs.
Economists often view second-home purchases as a leading indicator of broader economic sentiment because they are discretionary purchases. A decline in vacation-home buying can signal growing concerns about affordability, consumer confidence, and household financial flexibility, even among higher-income buyers who traditionally dominate the market.
While demand has softened, the Chattanooga region continues to attract interest from buyers seeking mountain, lake, and outdoor recreation properties. However, the latest figures suggest that the extraordinary vacation-home boom sparked by the pandemic has largely run its course.