A deep dive into the gritty data and sources of vacancy rates by the Census Bureau.
By wolf richter for wolf street,
The Census Bureau projects that in the fourth quarter of 2022, the rental vacancy rate will drop to 5.8% and the homeowner housing vacancy rate will drop to 0.8%, matching record levels set earlier in 2022. These vacancy rates – particularly the homeowner vacancy rate – have been cited as evidence to support the claim that there is a “housing shortage”.
The homeowner vacancy rate has dropped from 1.6% in 2018 to 0.8% now. I’ve joked for a while that on this trend, the vacancy rate will turn negative in 2026. Explaining “negative vacancy rates” to the unsuspecting American public would be a hoot.
It’s only partially tongue-in-cheek. In fact, the Census Bureau uses formulas to find these vacancy rates that do not include all vacant units, and actually exclude vast categories of vacant units, depending on whether the units Why are you empty?
According to the same report from the Census Bureau, the overall vacancy rate combining homeownership and rental was 10.1% in Q4. On page 1, it shows the rental vacancy rate (5.8%) and the homeowner vacancy rate (0.8%), and then on page 4, it shows the actual total vacancy rate (10.1%).
“About 89.9 percent of housing units in the United States were occupied and 10.1 percent were vacant in the fourth quarter 2022,” says the Census Bureau report.
On page 4, we see that in Q4, 2022:
- Total number of housing units: 143.95 million.
- Year-on-year growth in housing units: +1.34 million
- Total number of vacant housing units: 14.55 million.
- Overall Vacancy Rate: 10.1% (14.55 million divided by 143.95 million).
How 10.1% compares to vacancy rates in previous decades.
When we look at the data from a few decades ago, we see that the annual total vacancy rate ranged from 8.9% in 1981 and 1982 to a high of 14.5% in 2009. Here are the lowest annual vacancy rates and the highest annual vacancy rates per year. decade:
- 1980–1989: 8.9% – 11.6%
- 1990–1999: 10.9% – 11.7%
- 2000–2009: 11.6% – 14.5%
- 2010–2019: 12.0% – 14.3%
Annual Vacancy Rate, 2015 – 2021:
- 2015: 12.9%
- 2016: 12.8%
- 2017: 12.7%
- 2018: 12.3%
- 2019: 12.0%
- 2020: 10.6%
- 2021: 10.8%
Vacancy Type, Q4 2022:
Out of total vacant units in Q4, 2022 (14.55 million, 10.1% of total housing units):
- Year Vacant: 10.95 million (7.6% of total housing units)
- Seasonal Vacant: 3.60 million (2.5% of total housing units).
Out of 10.95 million vacant units over the year,
- For Rent: 2.76 million, 1.6% of the total
- For sale only: 0.72 million, 0.5% of the total
- Rented or sold: 0.81 million, 0.6%
- Market held: 6.66 million, 4.6%
- For occasional use: 2.01 million
- Temporarily occupied by persons with “usual residence elsewhere” (URE): 1.11 million
- Others: 3.54 million
These 3.54 million “other” units under “held off market” were kept off the rental or sale market for these reasons (Census Bureau definitions,
- Foreclosure: Units under foreclosure, bank-owned, bankrupt, up for auction, sheriff’s sale, seized, have a lien, or been taken for taxes.
- Personal/Family Reasons: Owner does not want to rent/sell, Owner is deciding what to do, Owner is keeping for family use, Owner is living with family, or Owner is looking for assisted living or other types of care is in position.
- Legal Proceedings: Units held for estate settlement, in probate, involved in divorce or eviction proceedings, or code-violating units where the owner has died.
- Preparing to Rent/Sell: Units that will be put up for rent or sale this month or where the owner is meeting with a listing agent/agency this month to prepare to put the unit on the market.
- Placed for storage of household furniture: Units that are vacant and are used to store excess household furniture or other household items.
- Needs Repair: Units that are in need of repair, refurbishment or cleaning, but are not currently being repaired, refurbished or cleaned.
- Currently under repair/renovation. Units that are being repaired, refurbished, refurbished or cleaned.
- specific use housing. units that are vacant and only used by a specific group of people one or more times throughout the year, such as military housing, employee/corporate housing, temporary quarters, units held by a church, student housing (dormitories and school -Sponsored accommodation), model home/apartment, or guest house.
- Extended absence. Units where the owner is on extended duty or military duty, is temporarily out of the country, or is incarcerated.
- Abandoned/Potentially Demolished/Potentially Condemned Units: Abandoned units, units that are said to be demolished or condemned but where there is no positive evidence such as signs, notices, or houses or blocks Marks to indicate the unit is to be demolished or condemned.
- Other Write-in/Not Known: Units where the knowledgeable responder and/or field representative do not know why the unit is other vacant.
Formula for vacancy rates.
landlord vacancy rate (0.8%) is calculated as follows:
- Year round landlord listing of vacancies for sale
- divided by the sum of
- Owner Occupied Units + Vacant Year-Round Units Sold But Awaiting Occupancy + Vacant Year-Round Units For Sale Only.
out of line: You see what this formula does? This excludes large categories of vacant homeowner units—units that are “off the market” and units that are “seasonally vacant.”
rental vacancy rate (5.8%) is calculated as follows:
- Year round vacant units for rent
- divided by the sum of
- Renter-occupied units + year-round vacant units rented but awaiting occupancy + year-round vacant units for rent.
out of line: And sure enough, the formula excludes rental units that are “off the market” and rental units that are seasonally vacant.
Whether or not the formulas that lead us to a vacancy rate of 0.8% or 5.8% make sense or are useful, it is important that we know what they mean when someone says that there is a housing shortage because homeownership The vacancy rate is 0.8%.
Key: 6.6 million homes “off the market” — and that includes homes that, as I’ve pointed out many times before, are vacant because the homeowner bought another home and moved out but didn’t sell the old and now vacant one. Chosen houses to ride the housing boom to the very tippy top of the spike, which is now broken, Those houses are in the shadow list which sooner or later will emerge from the shadow.
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