Millions of Homes Still Being Kept Vacant as Housing Costs Surge, Report Finds

A new report from Lending Tree, an online marketplace for loans, looked at census data on the nation’s 50 largest metropolitan areas and found there are 5.47 million vacant housing units, with an average vacancy rate of 7.22 percent. The vacancies include owner-occupied units and rentals, including single family homes, apartment units and mobile homes. 

The nationwide number of housing vacancies is about 13.9 million, but a focus on the largest metropolitan areas provides a better snapshot of vacancies where there’s a higher density of people, jobs and demand for housing. There are an estimated 421,000 individuals without homes in the entire U.S. (the total number of unhoused people on a given night is closer to 600,000).  

While the average vacancy rate in metropolitan areas is not altogether unusual historically, report author Jacob Channel told Motherboard, the report shows that reasons for vacancies vary widely between cities. Those reasons include vacation rentals and AirBnBs, disinvestment and deteriorating conditions, and a mismatch between local wages and housing costs. Only about a quarter of housing units that are vacant are actively available for rent. And only 8 percent of housing units in these metropolitan areas are vacant because they’re being renovated. The rest are simply unused for at least part of the year. 

The report, which looked at the Census’ 2022 American Community Survey data, complicates a common but simplistic narrative about housing: that a higher vacancy rate always corresponds with greater affordability. There’s no clean relationship between the vacancy rates of the largest metropolitan areas in the United States and their relative affordability, said Channel.

“It's not so simple to say high vacancy means low home prices or vice versa, because there are so many factors that go into play,” Channel told Motherboard. “More specifically, the reasons why homes are vacant in the first place plays a really big role in how expensive homes are in a given area.”

About 26.6 percent of the nation’s vacant housing units are actively available for rent. While this category might theoretically be the most likely to decrease housing costs as renters have more options, the metropolitan area with the highest amount of “for rent” vacancies is New Orleans, where 16.6 percent of all vacant units are actively available to rent. Yet the city is not considered affordable, and lacks 47,000 units affordable to the most low-income households, according to a recent report. Channel said New Orleans’ low wages and disinvestment in existing housing may be to blame for the lack of affordability and high vacancies. 

Another city with high vacancies in Birmingham, Alabama, which has a 10.72 percent vacancy rate. Yet Birmingham has an affordability problem driven by a number of factors, including low wages and residential segregation, and recently tried to address a growing homelessness issue through the use of tiny homes.

In Miami, where the vacancy rate is 12.6 percent, the most common reason for a vacancy is that the home is “being used for seasonal, recreational or occasional use,” a census category that includes vacation homes and AirBnBs, which accounts for 53.3 percent of its 339,000 vacancies. Similarly, Tampa, Florida has a vacancy rate of 12.15 percent and 43.8 percent of its 184,000 vacant units are vacation rentals or AirBnBs. 

In some cases, housing units are vacant because they are priced too high. Because home-building became more expensive during the pandemic as a result of supply chain problems, developers tried to pass those prices off to renters to pay off loans. If no one meets their price, some landlords might try to wait out the market rather than get locked into a lease with a lower rent. 

“Sometimes if you see an area where homes are sitting on the market for a really long period of time, and their prices are steep relative to incomes within the area, that can be a very clear reason why vacancy rates might be high within a given place.,” Channel said. But Channel said this problem depends on the region: in San Jose, home prices are extremely high but only remain on the market for a few weeks.

One report from Harvard’s Joint Center for Housing Studies last summer showed that while the U.S. was building more homes than it has in 50 years, it was still losing the lowest-income units faster than they were being replaced. The report found most units being built were priced on the higher end and many affordable units were being deregulated and facing demolition.

Overall, Channel said the takeaway is that there are many kinds of vacancies. Some metro areas have high vacancies in one neighborhood and lower vacancies in another, also signs of residential segregation and disinvestment. “I think the sort of general thrust of the study is that ‘empty’ does not necessarily mean that the units are in the same position every single time,” Channel said.