5.6 Million Vacant Homes In America: Are We Misunderstanding The Housing Crisis? Experts Weigh In

The narrative of America’s housing crisis has long centered on a severe shortage of available homes. While true, data issued by LendingTree found that there are 5.6 million vacant properties across the nation’s 50 largest metros.

The figure represents an average 7.37% vacancy rate, prompting a closer look at the true nature of the housing crunch.

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“With home prices as high as they are, it may seem strange that so many homes in the nation’s largest metros are sitting empty,” LendingTree senior economist Jacob Channel said of the apparent contradiction. Yet, the senior economist noted that the vacancies don’t necessarily indicate an abundance of housing.

According to Realtor.com senior economic research analyst Hannah Jones, the chief reason for that is rental availability. “Rental vacancy has climbed in recent years as rental inventory has managed to recover significantly in many markets,” Jones said in a Realtor report. 

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The trend suggests a shift in the rental landscape rather than just a glut of abandoned properties.

Seasonal and recreational use accounts for the second most common reason for vacancy. “A house can be considered vacant even if it’s only empty for a relatively short time, like if it’s a vacation home not being used,” Channel said. Personal and family reasons are the top three causes, including situations where owners still decide on a property’s future use.

Despite the vacancies, the housing supply remains tight. According to Realtor, homeowner vacancy rates stand at just 0.9%, while rental vacancy rates are at 6.6% – both near historic lows. Jones said that “for-sale inventory remains more than 20% below pre-pandemic levels,” which drives home prices despite waning buyer demand.

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The geographical distribution of vacancies adds another layer to the story. New Orleans tops the list with a 14.50% vacancy rate, followed by Miami at 12.92%. Jones attributes it to the seasonal nature of popular vacation destinations, where “demand for short-term rentals or vacation rentals is very seasonal, which can boost vacancy in the offseason.”

At the other end of the spectrum, Portland, Oregon, has the lowest vacancy rate at 4.54%, with Minneapolis and Washington D.C. close behind. In those metros, rental availability is the primary driver of vacancies.

The implications for housing prices remain limited. Channel said that “more nuanced factors are in play that help dictate prices,” including location, mortgage rates, property characteristics and the duration of vacancies.

While millions of properties sit vacant, their impact on overall housing affordability and availability is far from straightforward. As the debate over America’s housing crisis continues, the findings suggest a need for a more nuanced understanding. 

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