- There are 5.5 million empty homes across the 50 biggest US metros, LendingTree reported.
- The study showed the US's 50 largest metro areas have a vacancy rate of 7.22%.
- New Orleans had the highest vacancy rate at 13.88%, followed by Miami, and Tampa, Florida.
While the housing market is historically tight and seemingly less affordable by the day, the largest US cities have a surprisingly large stock of vacant homes.
A study from LendingTree analyzed and ranked the latest US Census Bureau American Community Survey data of the largest 50 metros by their share of unoccupied homes. The average vacancy rate across the cities analyzed was 7.22%, accounting for 5.475 million homes.
New Orleans, Miami, and Tampa, Florida had the highest vacancy rates, with 13.88%, 12.65%, and 12.15%, respectively. For those three cities, there are more than 600,000 empty housing units.
The three cities with the lowest vacancy rates were Minneapolis, Austin, Texas, and Washington DC, at 4.51%, 4.57%, and 4.98%, respectively. These are also the only three metros with vacancy rates below 5%, LendingTree said.
The houses sitting vacant in these areas don't go towards relieving pressure on the tight housing market, which is experiencing a dearth of homes for sale and historically high prices. That's because the homes for the most part are either waiting to be rented out or are seasonal homes that are not always occupied by their owner.
So while vacancy rates alone cannot fully explain the state of the housing market, the numbers offer a localized view of how specific areas are faring.
High vacancy rates and home prices, LendingTree says, could suggest an area has uniquely attractive features, like being a popular vacation spot or target of investors. On the other hand, high vacancy and low home prices could mean an area has various socioeconomic hardships.
In any case, affordability is challenged for many Americans. High mortgage rates make it difficult for homebuyers to enter the market, and also keep current homeowners from selling to avoid parting ways with ultra-low rates they locked in years ago.
This lock-in effect keeps potential buyers and sellers on the sidelines, and means prices aren't falling as they often do in times of rising mortgage rates.
Borrowing costs for prospective buyers have soared above two-decade highs, touching 7.53% this week. Meanwhile, mortgage applications plunged to their lowest level since 1996 last week, according to the MBA's latest survey, falling 6%.
"Mortgage rates continued to move higher last week as markets digested the recent upswing in Treasury yields," MBA vice president Joel Kan said. "The purchase market slowed to the lowest level of activity since 1995, as the rapid rise in rates pushed an increasing number of potential homebuyers out of the market."