Mausam Bhatt Chief Product and Technology Officer | realtors.com
A recent study by LendingTree has highlighted a paradox in the U.S. housing market, revealing that despite the perceived housing shortage, there are 5.6 million vacant homes across the nation. The report ranks the 50 largest metropolitan areas based on their share of unoccupied homes, with an average vacancy rate of 7.37%.
Jacob Channel, a senior economist at LendingTree, clarifies that these figures do not indicate an excess of available housing: "Just because there are millions of homes sitting vacant across the nation’s 50 largest metros, that doesn’t mean that the U.S. has an overabundance of housing." He acknowledges that high home prices make it puzzling why so many properties remain empty.
The primary reasons for vacancies include rental availability, seasonal use, and personal or family considerations. Realtor.com® senior economic research analyst Hannah Jones notes, "Rental vacancy has climbed in recent years as rental inventory has managed to recover significantly in many markets."
Channel further explains that some homes are vacant due to being used for recreational purposes or because owners have yet to decide on their future use: “A house can be considered vacant even if it’s only empty for a relatively short time.”
Despite these vacancies, Channel emphasizes that they do not translate into increased housing supply: “Given the reasons why homes tend to sit vacant—and that vacancies tend to only be temporary—there isn’t much reason to conclude that the nation’s housing supply is anything but insufficient in the face of homebuyer and renter demand.”
Current homeowner and rental vacancy rates stand at 0.9% and 6.6%, respectively—both near historic lows due to limited supply against demand.
Regarding potential impacts on housing prices, Channel suggests it's unlikely they will decrease significantly due to these vacancies: “More nuanced factors are in play that help dictate prices—like location, the kind of mortgage rates offered to borrowers.”
Jones adds insight into market conditions: "The for-sale market remains undersupplied, which has kept home prices elevated despite waning buyer demand."
LendingTree's analysis identifies New Orleans as having the highest vacancy rate at 14.50%, primarily due to rentals waiting for tenants. Other cities like Miami and Tampa also show high vacancy rates attributed mainly to seasonal or occasional property use.
Conversely, Portland boasts one of the lowest vacancy rates at 4.54%, where most unoccupied units are listed for rent.
Overall, while numerous factors contribute to home vacancies nationwide, experts suggest these do not alleviate current challenges related to housing supply shortages.
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