Just 13.8% of American Families Own a Second Home or Other Residential Property. The Typical One Is Worth $280,000
A lake cabin sounds like the dream until the roof, the insurance bill, and the tax code show up. Before you sign anything, one simple question could reveal whether a second home is a getaway or a trap.
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Many people dream of a lake cabin or a beach condo, but far fewer actually own one. The Federal Reserve’s Survey of Consumer Finances shows that just 13.8% of American families owned residential property other than their main home in 2025. That’s up from 12.9% in 2022. So the second home is still a minority thing, but it’s slowly getting more common.
The category covers more than vacation homes. It also includes rental houses, condos that get leased out, and any other residential real estate a family owns but doesn’t live in full time.
For families who own one, the median value rose from $246,200 in 2022 to $280,000 in 2025, a 14% increase. These figures are in 2025 dollars, so that gain reflects the increase after inflation.
What the $280,000 Median Really Means
The median is the middle value. Line up every owner from the cheapest property to the priciest, and the median is the one right in the middle. It’s a better guide than the average here, because a handful of beachfront estates can pull an average way up while the typical cabin stays modest.
Half of the families who own other residential property report holdings worth less than $280,000, while the other half report more. That figure reflects the value of their combined holdings in this category, rather than the price of a single vacation home.
Rising home prices helped lift real estate values during those years. The Federal Reserve notes that its broader home price benchmark 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 increase was slower than inflation.
Who Actually Owns the Extra Houses
The Fed’s Distributional Financial Accounts track real estate wealth, including investment and vacation properties, across wealth groups. In the second quarter of 2026, the top 10% of households held 43.7% of it.
The bottom half held just 9.7%, down from 11.5% in late 2015. Extra property tends to go to families who already have a lot, because buying a second place usually takes cash left over once the first home is paid for.
Costs That Keep Coming After Closing
Beyond the purchase price, a second property comes with its own property tax bill, its own insurance policy, and its own repairs.
Roofs, furnaces, and plumbing wear out whether anyone’s living there or not, and then there’s travel: gas, flights, and the time it takes just to get there. In retirement, every one of those bills gets paid out of a fixed income, with no paycheck to cover it.
Some owners cover part of the cost by renting. Our earlier piece on the Augusta rule explains a quirk in the tax code. If a home you use as a residence is rented for less than 15 days in a year, that rental income stays out of your taxable income.
You can’t deduct rental expenses either. Our coverage of renting out rooms and backyard cottages looks at other ways homeowners earn money from space they already have.
Why the Tax Code Treats a Second Home Differently
The big home-sale tax break covers your main home. Federal law lets you exclude the gain on a sale if you owned the property and lived in it as your principal residence for at least 2 of the last 5 years.
The cap 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).
Owning a rental adds one more tax rule to know about: if you took depreciation, an annual deduction for wear and tear, the IRS makes you “recapture” it when you sell. That means the depreciation you deducted becomes taxable income again, and the home-sale exclusion can’t protect that part of the gain (26 U.S.C. § 121(d)(6)).
One break applies to almost any property: the step-up in basis at death. Heirs generally receive the property at its fair market value on the date of death. Decades of gains can disappear for tax purposes, a topic our coverage of inherited homes walks through in detail.
Retirees Who Should Think Twice
Houses are slow and expensive to sell. Existing home sales ran at a 3.99 million annualized rate in September 2026, which counts as a soft market. If most of a retiree’s savings is sitting in a cabin, there’s no way to sell off a small piece when the car dies or a medical bill shows up.
Anyone who’d have little cash left after buying should think twice about locking that money in a property that’s hard to sell.
One Question to Answer Before Buying
The Fed’s data shows second homes are getting a bit more common and a bit more valuable, but it can’t tell any one family whether owning one makes sense. So answer one question before signing anything: would I still want this place if I could only use it half as often?
If the answer is yes, the taxes, maintenance, and travel may feel worth it. If it’s no, renting a cabin for a few weeks each year could give you the getaway without the bills.
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David Beren has been a Flywheel Publishing contributor since 2022. Writing for 24/7 Wall St. since 2023, David loves to write about topics of all shapes and sizes. As a technology expert, David focuses heavily on consumer electronics brands, automobiles, and general technology. He has previously written for LifeWire, formerly About.com. As a part-time freelance writer, David’s “day job” has been working on and leading social media for multiple Fortune 100 brands. David loves the flexibility of this field and its ability to reach customers exactly where they like to spend their time. Additionally, David previously published his own blog, TmoNews.com, which reached 3 million readers in its first year. In addition to freelance and social media work, David loves to spend time with his family and children and relive the glory days of video game consoles by playing any retro game console he can get his hands on.
