Significant numbers of Americans are purchasing second homes. They may have been encouraged by a 1997 change in the tax laws.

• The change permits most home-sellers to exclude up to $500,000 in capital gains on their homes from taxation.

• So many families can now sell their homes and use the proceeds to buy both a smaller residence and a second vacation home -- a strategy particularly attractive to couples whose children have flown the nest.

• Second-home sales hit 377,000 last year -- up 27.4 percent from 1995, according to figures from the National Association of Realtors.

• The median price of vacation homes is up 49 percent since 1991.

Noting that the median age of second-home buyers last year was 43, the association expects the large number of people in their 40s and 50s entering the second-home market to add some 100,000 to 150,000 units to housing starts each year over the next decade.

Source: Gene Koretz, "Economic Trends: A Yen for Homes Away from Home," Business Week, October 16, 2000.