A Healthy Housing Industry Emerging: Rental and Homeowner Vacancy Rates 2007 to 2016
This is the final factoid in a series of four factoids detailing the continued growth of the post-recession Housing Industry. After years of fighting back from the housing bubble pop, the Housing Industry is finally on the mend and appears to be getting healthier by the year. Although still shy of 2007 pre-recession levels, housing appears to be catching up fast despite a couple of stumbles last year.
As the housing industry grows, vacancy rates among both Rentals and Homeowner units continue to decline. Rental vacancy rates at 6.9 percent are at their lowest in over 30 years, giving way to high rents. Meanwhile homeowner unit vacancies have also continued to drop to 1.7 percent in 2016 – the lowest in over 10 years.
The vacancy rate of rentals is lowest inside metro areas, both in principle cities and in the suburbs, compared to outside of metro areas. Inside metro areas for both urban (principal cities) and suburban areas have similar vacancy rates at 6.7 percent and 6.3 percent respectively. These rates have continued to fall over the last seven years. Meanwhile, vacancies outside metropolitan areas are much higher at 9.4 percent last year and have shown little improvement over the last few years.
For homeowner units, vacancy rates in the suburbs of metro areas are low at 1.5 percent in 2016 and only slightly higher at 1.9 percent in principal cities of metro areas. Vacancy rates outside metro areas are higher at 2.3 percent. Pent up demand from Millennials aging into their prime homeownership years combined with low vacancy rates have set the stage for good housing growth in the near future.
Source: U.S. Census Bureau, Housing Vacancies and Homeownership