There’s a crisis simmering right before our eyes: too many individuals looking to purchase or rent homes or apartments and many of them continue to come up short. Either due to lack or availability or not having the finances to afford a mortgage.
The 2014-15 housing market was recently scrutinized and the current Census Bureau estimates in addition to the latest American Community Survey demonstrates that Housing vacancies are currently at the lowest levels since at least 2005.
Hey buddy, can you spare a house?
According to an Economist Outlook article nationally, “the rental vacancy rate was 7.3 percent while homeowner housing rate was 1.9 percent for the third quarter 2015.Conversely, out of the 32,634 zip codes, 79 percent had a vacancy rate less than 25 percent, 16 percent had 25 to 50 percent, 4 percent had 50 to 75 percent, and 1 percent had 75 percent and higher.” At the other end of the spectrum, Pennsylvania (8.5% of the housing units) and New York (5.9% of the housing units) had the most zip codes with zero percent housing vacancy rate.
Obviously every zip code is different. I looked up mine and found there were only 38 vacancies among houses. Only 38 houses for sale. Extremely low but it makes sense given the size of this particular area.
At metro area level, here is a summary of the areas with the lowest and highest housing vacancy rate in 2014:
|Highest Housing Vacancy Rate|
|Metro Area||Vacancy Rate 2014||Vacancy Rate 2011|
|Ocean City, NJ||58.4%||54.5%|
|Barnstable Town, MA||41.4%||39.4%|
|Myrtle Beach-Conway-North Myrtle Beach, SC||38.9%||38.6%|
|Naples-Marco Island, FL||36.8%||39.1%|
According the US Census Bureau, the lowest vacancy rates are in metro areas with strong job gains and/or too few new home constructions. The highest vacancy rates are in metro areas with many vacation homes.
Vacancies fall, rent rises
Meanwhile, the Joint Center for Housing Studies of Harvard University recent The State of the Nation’s Housing 2015 reports that the growing number of renter households has stressed the rental housing market nationwide, causing vacancies to fall while rents continue to rise.
The national rental vacancy rate in 2014 fell to its lowest point (7.6%) in twenty years, while rents rose at 3.2%, twice the rate of inflation. And while 1.2 million apartments were added to the market since 2010, they serve the higher end of the market, with a 2013 median rent of $1,290.
At this amount, more than two-thirds of renter households cannot afford market rent.
We keep hearing there are too many individuals looking to rent or buy and not enough houses or apartments. The latest data seems to bear this out.