Vacancy Rates Fall

The homeowner vacancy rate fell in Q1 of 2021 highlighting the continued tightness of the housing market (CB)

  • M-O-M: The homeowner vacancy rate of 0.9 was 10 basis points lower than the rate in the fourth quarter of 2020
  • Y-O-Y: The vacancy rate was 20 basis points lower than the rate in the first quarter 2020

On the rental front, vacancy rates were up 20 basis points from the last quarter and were also up 30 basis points from a year ago at the same time.

  • Not surprisingly, the rental vacancy rate in principal cities (7.3%) was higher than the rate in the suburbs (5.8%).

WHY DOES THIS MATTER? In 2008, the occupancy rate was 2.8%. This is why some foresaw the crash. Home prices were sky high but there wasn’t anyone in the houses. Today it is the exact opposite. Occupancy rates are the lowest they have been in 30 years which explains why home prices are soaring. There is no inventory because all the houses are currently lived in. This doesn’t mean some markets aren’t overheated, but it does mean a giant crash in home prices seems remote.