Home Vacancy Rates are Back to the 90s

Home vacancy data released by the Census Bureau, shows that we’re back to the 90s.  The rate of vacant homes dropped to 1.4%, the lowest level since 1994 – almost a quarter of a century. The rate measures privately owned homes standing vacant, typically because they’re for sale or because new owners haven’t moved in yet. In 2008, during the foreclosure crisis, it reached a record 2.9%.

Other than the notable low in the vacancy rate, the “Residential Vacancies and Homeownership Report” had little new information for the home-sale market. The homeownership rate was 64.2%, matching the year-ago quarter and not far from the 64.8% in 2018’s final three months.

For Americans under age 35, the homeownership rate was 35.4%, not far off the 35.3% from a year earlier. The share for the 35-to-44 age group was 60.3%, up from 59.8%. For 45- to 54-year-old Americans, it was 69.5%, down from 70%, and for people over 65 years old, it was 78.5%, matching a year ago.

There were 77.5 million homes occupied by owners in the first quarter and 43.3 million lived in by renters. Those number didn’t budge much.

Lower mortgage rates will help to support the housing market this year, which will keep vacancy rates low, economists say. The 30-year fixed-rate mortgage averaged 4.2% this week, compared with 4.58% a year ago, according to Freddie Mac.

“Despite the recent rise in mortgage rates, both existing and new home sales continue to show strength – indicating the lagged effect of lower rates on housing demand,” said Sam Khater, Freddie Mac’s chief economist. “This, along with improved affordability, should push housing activity higher in the coming months.”

Source:  Housing Wire/Census Bureau