More Than 10% of All Homes Sit Vacant, but Only a Tiny Fraction Are for Sale

Amid a deepening housing affordability crisis, roughly 1 in 10 homes in the country is sitting vacant, concludes a new report.

Around 14.5 million houses are empty, according to a new analysis of U.S. Census Bureau data compiled by personal finance site LendingTree. However, only a shockingly low number of these homes—fewer than 800,000—are actually up for sale.

Among the states, Maine has the highest overall vacancy rate at 21%, while Connecticut has the lowest, with just 7% of homes there sitting empty. Nationally, 10.1% of all homes are vacant.

However, as the report highlights, a high vacancy rate does not guarantee more opportunities for homebuyers.

"Not all vacant homes are available to people looking for housing," Matt Schulz, LendingTree's chief consumer finance analyst, says in the report. "A key question isn’t how many homes are vacant, but how many are available for someone to buy or rent."

One reason why a house may be vacant is that it is someone's seasonal, recreational, or occasional-use home (such as a pied-à-terre). The percentage of empty homes at the time of the survey that fall into that category is 32.6%.

A home may also be vacant because it is for rent (18.2%), for sale (5.5%), sold but not yet occupied (4.1%), rented out but not yet occupied (4.1%), or being held for migrant workers (0.2%).

However, the most common reason (35.9%) a home was listed as vacant is "other," a category that includes homes that await settlement of an estate, legal proceedings, repairs, or unspecified personal reasons, according to the analysis.

In the slightly mysterious "Other Vacant" category, Mississippi has the most homes. Of all homes in the state, 9.1% fall into that category, which accounts for 62.5% of vacant homes in the state.

Mississippi Bang Realty broker Teresa Love says she has seen her share of vacant houses in the state. She currently represents a foreclosed four-bedroom home in Pearl, in Rankin County.

"There could be different reasons" why an abode might be vacant, she rells Realtor.com®. "Someone could pass [away], and the inheritor doesn't pay the remaining mortgage or taxes, so then those properties are subjected to foreclosure or tax sales."

Quite a few homes that are for sale but empty are because developers have priced them too high, she adds. "The cost of living hasn't caught up to the astronomical prices homes are at."

Even reasonably priced foreclosed homes can be hard to unload because of the difficulty of getting a conventional mortgage, she explains.

"I do expect it to move pretty quickly," she says of her foreclosed 2,122-square-foot listing, which is priced at $211,000. "But the loan has to be a certain type of loan because of the improvements that need to happen."

Where are the second homes?

Across the country, millions of homes sit empty for much of the year because they are second or third homes used only occasionally by their owners.

In Vermont, 14.7% of the housing stock falls into that category, with 75.8% of those houses vacant some or much of the time. That means that an astonishing 1 in 7 homes in the state remains vacant for many months of the year, making it the state with the highest percentage of seasonal/recreational homes.

"It's a relatively small, relatively sparsely populated state dependent on seasonal tourism," says Schulz. "The unique nature of Vermont pushes that vacancy number higher rather than other big vacation states."

Another big seasonal state, Maine, has the highest overall vacancy rate in the nation, at 20.6% of total housing stock, or 154,717 homes. That's well above the national rate of 10.1%. Many of those vacancies are due to the state being hugely popular with second-home owners.

Popular second-home destinations in Maine include York County and Cumberland County, according to WGME. York County is home to tourist meccas Orchard Beach and Kennebunkport (known for the Bush family compound).

The state with the third-highest vacancy rate in the nation, at 17.6%, behind Maine and Vermont, is Alaska. Not coincidentally, these are also the three states with the highest percentage of seasonal homes, according to the U.S. Census Bureau.

In general, a high vacancy rate can help lower home values. However, there is no guarantee that it does.

These three states with the highest vacancy rates—Maine, Vermont, and Alaska—all have median home list prices well above the national median of $430,000, which makes sense in the context of why these homes are "vacant."

The majority of vacancies aren't because a home is abandoned or in probate or for sale, but because the homes have owners who are only around part of the time.

Backlash against second homes

As the housing crisis deepens and many younger adults find themselves priced out of the market, there has been somewhat of a nationwide backlash against those who own not just one home, but two or more.

States currently implementing pied-à-terre taxes are among those most pinched by the housing shortage: California, Hawaii, Montana, New York, Rhode Island, South Carolina, Vermont, and the District of Columbia.

Even states that want to ban property taxes don't have much love for the second-home owner. Florida, which has the largest number of second homes in the nation, with 1 million vacation homes, or 15% of the nation's total, is considering a measure that would eliminate property taxes for 60% of homeowners—but second homes would not be included in the tax relief.

Are vacancies exacerbating the housing crisis?

With so many homes sitting vacant across the country, it raises questions about whether those empty houses might be contributing to constrained supply and driving up prices for full-time residents.

Schulz says that all depends on the area, as real estate trends and prices tend to be hyperlocal. The Deep South states of West Virginia, Mississippi, Alabama, Louisiana, and Arkansas all have higher than average vacancy rates—and significantly lower median home prices than the national.

"I don't know that it's too much vacancy," he says of the nationwide numbers. "One of the things we keep seeing is how different the housing market can be from state to state."

He says that, at least right now, a good solution for the housing crunch—for those who can swing it—is to move someplace where the homes are more plentiful and affordable.

"If homeownership is something really important to a person, and they have the flexibility to go other places, then they should understand they may have more opportunities" somewhere else, he says. "If people can move to where costs are lower, then homeownership becomes more of an option."