New data shows median home values run $167,000 higher in the markets where inventory is tightest
If you are brokering in a market that continues to struggle with a lack of housing inventory, hearing that there are 14.5 million vacant homes in the United States might make you wonder where they are. Of course, that number is a little misleading.
Of those 14.5 million vacant units, fewer than 800,000 are listed for sale, according to a LendingTree analysis of US Census Bureau data, and another 4.7 million are seasonal or recreational properties unavailable to families looking for year-round housing.
Housing markets are hyperlocal, and some have an abundance of inventory. But when buyers see the number of vacant homes advertised, they can be frustrated when they hit the market and don't find what they're looking for, one analyst said.
Matt Schulz (pictured top), chief consumer finance analyst at LendingTree, said the report's value is in the nuance behind the total.
"I think this report is interesting in part because it just breaks down how many different reasons there are why places have vacancies," Schulz told Mortgage Professional America. "Like in Vermont, New Hampshire, and Maine, 7 out of 10 homes that are vacant are seasonal or recreational, like vacation home, Airbnb sort of stuff.
“So it's interesting because there's frustration because of the inventory in the housing markets. And all of these vacancies aren't necessarily making things easier for the average buyer."
Sellers still waiting
The largest single vacancy category in the Census Bureau data is labeled "other vacant," a catch-all covering everything from homes under foreclosure to properties being held off the market by owners either unwilling to part with a second home or trade a locked-in low rate for a higher one.
Schulz said that dynamic is just one more reason buyers and sellers who have a choice are choosing to wait.
"I think all of it is just reason number 500 why a lot of people are waiting and just kind of saying, well, maybe now just isn't the time," he said. "Obviously a lot of factors go into when people choose to buy or sell. And a lot of times you don't have a choice as to when you do it. But for those who do, this is another reason why they may say I think I'm going to wait a little bit."
The one data point that offers some encouragement is that the national vacancy rate fell by 0.31% between 2023 and 2024. While that doesn’t sound like a large number, it equated to approximately 302,000 fewer vacant units. At a time when rates were elevated, more than 300,000 homes becoming occupied is good news, Schulz said.
"That's not nothing," he said. "It's not anything that is going to change the game, but with the housing market being stuck the way it is for quite some time, we'll take the good news as we can and hope that this continues going forward."
The price of inventory shortages
The difference in home prices between low-vacancy and high-vacancy areas is $167,678, according to the report. In the states with the tightest inventory, including Connecticut, Washington, and California, the average median home value is $435,118, compared with $267,440 in states where vacancy rates are highest.
Schulz said the gap reinforces something brokers already know but that the data quantifies more sharply than most people expect.
"It kind of gets at stuff that we talk about, which is just how different the market can be from one place to the next," he said. "We tend to talk about the housing market as this one monolithic thing, but we're 50 different states and a whole lot of different stuff going on in a lot of different places. And this report is just further proof of that."
The rate environment is compounding the inventory problem, and Schulz said the week-to-week market volatility is doing real damage to buyer confidence.
"The unpredictability of it all can be jarring for consumers," he said. "The last thing you want is to go in thinking that one set of numbers that you've run are right and pointing you in the right direction and then stuff changes significantly in a pretty short period, and it makes things a lot harder."
Schulz said unlocking more inventory is less about rates specifically and more about the broader environment.
"One of the things that would help is a little more stability, both economically and globally," he said. "When it's hard to know where things are going, people tend to sit on their hands. And even if we knew that things were going to be difficult for a little while, at least directionally you can know that and you can plan for it. But when it's just kind of everywhere, it's hard for everybody involved."
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