Where Did All the Empty Homes Go?

About 10 years ago, the U.S. began to use its housing stock in what could be called a more efficient manner. More housing units became occupied by full-time residents, resulting in a shrinking share of units classified as "vacant" by Census Bureau's definition. These vacant units include a portion of homes available for sale or rent, second homes, units awaiting repairs, and units that otherwise remain unoccupied. Notably, based on Census ACS vacancy data (which differs a bit from Decennial Census data, as explained in our recent demographic report, A Decade Divided, over the five years ending in 2024, the vacancy rate for the U.S. declined by 260 basis points to 9.5%.

What drove this? Did households simply flee to the suburbs and exurbs? Did they move into their second homes and sell their primary homes? The answer is a bit of both — and more. Geographically, all 50 states saw a decline in vacancy rates between 2019 and 2024 and each of the three major components of vacancies contributed meaningfully to the 260 basis point aggregate decline, with seasonal homes contributing about 90 basis points, homes for sale or rent 60 basis points, and other vacancies 100 basis points.

In terms of timing, although the trend of declining vacancy rates was in place prior to the onset of COVID, the pandemic appeared to accelerate it; nearly all of the decline occurred from 2019 to 2022, when the vacancy rate fell 240 basis points to 9.7%. A shrinking share of second homes drove 70 basis points of this decrease, with FL, VT and ME being some of the most notable decliners. Looking more broadly, amongst the 10 states having the greatest share of housing stock classified as second homes in 2019, eight ranked among the 10 states with the largest declines in vacancy rates in 2019-2022, with an average decline of 430 basis points.

The "other vacancy" category, which includes unoccupied units that are neither seasonal nor available for rent or sale and can reflect circumstances ranging from foreclosure and renovation to legal proceedings, also contributed a meaningful 90 basis points to the national decline in 2019-2022. In terms of geography, the contributions here were broad-based, with 47 of 50 states showing declines, led by more affordable states in the Southeast and Midwest.

While there have been a number of major drivers of this trend in the decade to date, affordability has been a persistent underlying factor and, in our view, will continue to be an important driver going forward. Notably, where housing costs average less than 26% of local incomes, the vacancy rate contracted about 290 basis points in 2019-2024 but where housing costs averaged 30% or more of income, the vacancy rate declined only about 90 basis points. In short, with households generally seeking more spacious yet affordable accommodations, it appears the owners of previously empty units saw a greater incentive to get them back into active, year-round use.

Looking forward, we expect the decade-long decline in vacancies to have largely run its course, with vacancy rates likely to rise modestly through the end of the decade – a trend occurring in 1H26 per the Census’ more frequent but smaller sample Housing Vacancy Survey. For instance, consider that, in the aforementioned least affordable regions, vacancy rates increased by about 50 basis points from 2023 to 2024, indicating the absorption of vacant units has clearly reached its limit in some areas. This moderation or even reversal in absorption of vacant units has been observed more broadly in the rental market as well, where significant supply and other factors has resulted in elevated single-family vacancies and has actually pushed multifamily vacancies to a 14-year high. Finally, considering the seasonal home component of Census' vacancy rate, we expect demographic and macroeconomic factors will form a modest tailwind for second home ownership for the remainder of the decade.

In other words, the empty homes may not be gone for good— after a decade of being steadily absorbed into active full-time use, we expect some of them to begin reappearing.