Even in the face of rising mortgage rates and stagnating construction numbers, the housing market is still scorching hot. Because of this, it may be difficult to believe that more than 16 million homes across the U.S. are sitting vacant.
But this doesn’t mean millions of abandoned and dilapidated homes are withering away in the suburbs. Vacant homes can be unoccupied for many reasons beyond being uninhabitable. For example, a house can be vacant because it’s still on the market to be sold or rented or it’s a vacation home not currently in use.
Regardless of why homes are vacant, knowing an area’s vacancy rate can be an important part of understanding the overall health of its housing market.
To get a sense of vacancy rates in the U.S., LendingTree analyzed the latest U.S. Census Bureau data to rank the nation’s 50 states by their shares of unoccupied homes. Though areas with higher vacancy rates are often less expensive, that isn’t always the case. In fact, there are some notable instances where a state’s median home price and its vacancy rate can both be relatively steep.
Image Credit: Feverpitched/ istockphoto .
Key finding
Home prices in states with higher vacancy rates are often — but not always — lower than in states with lower vacancy rates. Median home prices across the 10 states with the highest vacancy rates are an average of about $168,000 lower than in the 10 states with the lowest vacancy rates. But there are exceptions. For example, Alaska boasts a higher-than-average median home value despite having one of the nation’s highest vacancy rates.
Here’s the data to rank the nation’s 20 states by their shares of unoccupied homes:
Image Credit: monkeybusinessimages / istockphoto.
25. Tennessee
Total housing units: 3,065,835
Occupied housing units: 2,702,490
Vacant housing units: 363,345
Vacancy rate: 11.85%
Median home value: $203,400
Image Credit: NathanMerrill.
24. Wisconsin
Total housing units: 2,738,305
Occupied housing units: 2,393,344
Vacant housing units: 344,961
Vacancy rate: 12.60%
Median home value: $212,600
Image Credit: FierceAbin.
23. Kentucky
Total housing units: 2,016,609
Occupied housing units: 1,759,434
Vacant housing units: 257,175
Vacancy rate: 12.75%
Median home value: $160,700
Image Credit: Thomas Kelley.
22. Missouri
Total housing units: 2,833,623
Occupied housing units: 2,463,458
Vacant housing units: 370,165
Vacancy rate: 13.06%
Median home value: $176,000
Image Credit: DepositPhotos.com.
21. Michigan
Total housing units: 4,643,918
Occupied housing units: 4,012,557
Vacant housing units: 631,361
Vacancy rate: 13.60%
Median home value: $179,500
Image Credit: DepositPhotos.com.
20. Delaware
Total housing units: 449,537
Occupied housing units: 387,778
Vacant housing units: 61,759
Vacancy rate: 13.74%
Median home value: $272,200
Image Credit: DepositPhotos.com.
19. South Dakota
Total housing units: 404,906
Occupied housing units: 349,073
Vacant housing units: 55,833
Vacancy rate: 13.79%
Median home value: $188,900
Image Credit: DepositPhotos.com.
18. Hawaii
Total housing units: 554,102
Occupied housing units: 477,480
Vacant housing units: 76,622
Vacancy rate: 13.83%
Median home value: $648,000
Image Credit: Art Wager.
17. Oklahoma
Total housing units: 1,759,576
Occupied housing units: 1,514,051
Vacant housing units: 245,525
Vacancy rate: 13.95%
Median home value: $152,500
Image Credit: DepositPhotos.com.
16. New Mexico
Total housing units: 955,942
Occupied housing units: 816,574
Vacant housing units: 139,368
Vacancy rate: 14.58%
Median home value: $188,000
Image Credit: DepositPhotos.com.
15. Montana
Total housing units: 524,644
Occupied housing units: 446,572
Vacant housing units: 78,072
Vacancy rate: 14.88%
Median home value: $272,600
Image Credit: YinYang.
14. North Carolina
Total housing units: 4,813,617
Occupied housing units: 4,088,898
Vacant housing units: 724,719
Vacancy rate: 15.06%
Median home value: $207,300
Image Credit: ” Darwin Brandis”.
13. Arkansas
Total housing units: 1,401,087
Occupied housing units: 1,185,599
Vacant housing units: 215,488
Vacancy rate: 15.38%
Median home value: $141,800
Image Credit: DepositPhotos.com.
12. South Carolina
Total housing units: 2,386,402
Occupied housing units: 2,009,401
Vacant housing units: 377,001
Vacancy rate: 15.80%
Median home value: $189,500
Image Credit: SeanPavonePhoto.
11. North Dakota
Total housing units: 382,115
Occupied housing units: 321,697
Vacant housing units: 60,418
Vacancy rate: 15.81%
Median home value: $205,200
Image Credit: DepositPhotos.com.
10. Wyoming
Total housing units: 281,946
Occupied housing units: 237,179
Vacant housing units: 44,767
Vacancy rate: 15.88%
Median home value: $236,600
Image Credit: AnujSahaiPhotography.
9. Louisiana
Total housing units: 2,103,943
Occupied housing units: 1,762,869
Vacant housing units: 341,074
Vacancy rate: 16.21%
Median home value: $174,000
Image Credit: Meinzahn / istockphoto.
8. Mississippi
Total housing units: 1,345,251
Occupied housing units: 1,126,474
Vacant housing units: 218,777
Vacancy rate: 16.26%
Median home value: $135,100
Image Credit: SeanPavonePhoto/istockphoto.
7. New Hampshire
Total housing units: 646,849
Occupied housing units: 538,552
Vacant housing units: 108,297
Vacancy rate: 16.74%
Median home value: $297,800
Image Credit: DepositPhotos.com.
6. Florida
Total housing units: 9,814,540
Occupied housing units: 8,133,696
Vacant housing units: 1,680,844
Vacancy rate: 17.13%
Median home value: $261,500
Image Credit: eyfoto / iStock.
5. Alabama
Total housing units: 2,302,582
Occupied housing units: 1,895,330
Vacant housing units: 407,252
Vacancy rate: 17.69%
Median home value: $162,300
Image Credit: Sean Pavone.
4. West Virginia
Total housing units: 896,570
Occupied housing units: 734,080
Vacant housing units: 162,490
Vacancy rate: 18.12%
Median home value: $130,500
Image Credit: DepositPhotos.com.
3. Alaska
Total housing units: 321,385
Occupied housing units: 255,456
Vacant housing units: 65,929
Vacancy rate: 20.51%
Median home value: $288,100
Image Credit: julof90.
2. Maine
Total housing units: 755,380
Occupied housing units: 584,057
Vacant housing units: 171,323
Vacancy rate: 22.68%
Median home value: $211,000
Image Credit: DepositPhotos.com.
1. Vermont
Total housing units: 341,405
Occupied housing units: 263,353
Vacant housing units: 78,052
Vacancy rate: 22.86%
Median home value: $235,000
Image Credit: ” DonLand”.
If so many homes are vacant, why are housing prices still so high?
In theory, vacancy rates should have a strong inverse relationship to home prices. In other words, a high vacancy rate would signify a lack of demand from buyers, which in turn would result in a larger supply of homes on the market and lower prices. The inverse would also be true where a low vacancy rate would signify a strong demand from buyers, less supply on the market and higher prices.
Because of this, it may be tempting to blame the current hot housing market solely on an overabundance of vacant homes on the market.
However, as is often the case when economic theory unfolds in real life, this theoretical framework doesn’t always hold. For example, the median home price in New Hampshire— the state with the seventh-highest vacancy rate — is about $10,000 higher than the median home price in Connecticut, where vacancy rates are the third-lowest in the nation.
This means there are many other factors in play that help dictate home price, like location, the kind of rates being offered to borrowers, square footage and the reasons why homes are sitting unoccupied — to name a few.
Because of this, vacancy rates alone can’t fully explain why homes are so expensive. But that doesn’t mean that vacancy rates are unimportant. Understanding an area’s vacancy rate can help shed light on how buyers and homeowners behave.
For example, if both vacancy rates and home prices are relatively low, it could mean that sellers are parting with their homes for less money than they could have potentially gotten. If vacancy rates are low and housing prices are high, it could signify that the market is highly competitive and that lower-income people might have a problem finding a house.
On the flip side, high vacancy rates and high home prices can suggest that an area has unique characteristics, such as being a vacation hot spot or targeted by investors.
Meanwhile, high vacancy rates and low home prices might mean an area is experiencing socioeconomic hardships.
Ultimately, while vacancy rates aren’t the only aspect of a housing market that matters, they’re an important part of better understanding its behavior.
Image Credit: tab1962 / iStock.
Tips for dealing with low inventory and a hot housing market
With high prices, rates rising and a limited number of homes available for sale, it can be tricky for buyers to navigate today’s housing market. But by keeping the following tips in mind, homebuyers may find dealing with the market less daunting than they initially expected.
- Shop around for the best possible rate. By shopping around and making different lenders compete for your business before you get a mortgage, you may be able to secure a lower interest rate than you would have had you gone with the first lender. The lower your rate, the less money you’ll need to spend on housing costs each month and the more expensive a home you’ll be able to afford.
- Consider different loan options. Not all lenders have the same mortgage requirements. If you’re worried that you won’t qualify for a traditional 30-year, fixed-rate mortgage, you may still find that you can get approved for loans from places like the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA).
- Don’t rush. With mortgage rates rising, you may feel pressure to rush into buying a house so that you can avoid paying higher interest. However, if you’re not in a position where you can comfortably afford a home or where you’re unsure if you want to be a homeowner, it may not be the best idea to buy right away. Being stuck in a home that you can’t afford or don’t want to live in can be worse than taking your time and potentially ending up with a slightly higher interest rate.
Image Credit: DepositPhotos.com.
Methodology
All the data used to conduct this study comes from the U.S. Census Bureau’s 2020 American Community Survey with one-year experimental estimates.
The survey measures the overall vacancy rate in a state by dividing the number of vacant households by the total number of households. Occupied households include homes owned or rented by occupants who use the home as their primary residence, while vacant households are broken down into seven subcategories. The U.S. Census Bureau defines these subcategories as follows:
- For rent: These are vacant units offered “for rent,” or vacant units that are offered for either sale or rent.
- Rented, not occupied: These are vacant units where a rental agreement has been reached but the future occupants haven’t moved in yet.
- For sale only: These are vacant units currently on the market.
- Sold, not occupied: Similar to “rented, not occupied,” this category covers homes that have sold but the new owner hasn’t moved in yet.
- For seasonal, recreational or occasional use: These include homes for seasonal use like beach cottages and hunting cabins or lodging for seasonal workers like herders and loggers. Timeshare condominiums are also included here.
- For migrant workers: These are homes for migrant workers to occupy while they’re employed in farm work during the crop season.
- Other vacant: This category captures vacant homes that don’t fall into any of the above.
This article originally appeared on Lendingtree.com and was syndicated by MediaFeed.org.
Image Credit: monkeybusinessimages/istockphoto.
More from MediaFeed
The US city that Boomer homebuyers are flocking to
Image Credit: perinjo / istockphoto.
