Top 10 Most Vacant Cities in America
Every first-year economics student knows that supply and demand determine cost, and housing is no exception. One of the best measurements of housing supply is the vacancy rate, which tells us how many housing units are empty at any given time. The vacancy rate is especially helpful for first-time homebuyers, house flippers looking for subpar properties to renovate, and real estate investors looking for hidden deals.
A new study from Anytime Estimate looks at the vacancy rates of the most populous 50 U.S. metros and lists the 10 most vacant cities in America in 2022. Whether you’re a renter looking for a city with a lot of affordable rental options, or a buyer looking to minimize the costs associated with buying a home, these 10 markets have the empty units and affordable prices you’re looking for!
More Than 16 Million Housing Units in the U.S. Are Vacant
This number may be surprising since there’s so much discussion in the news about a housing shortage. But the reality is that there’s not just a housing shortage — there’s a shortage of affordable housing. Much of the unmet demand in the housing market is concentrated in buyers looking for entry-level “starter homes” — a designation that excludes most of the 16 million housing units that are currently going unused.
Some Level of Housing Vacancy Is Desirable
A vacancy rate of zero would mean people have zero mobility; this would severely constrain the housing market, not to mention the ability of employers to hire and relocate the workers they need.
It’s Useful to Think of the Vacancy Rates as Similar to the Unemployment Rate
When the unemployment rate is low, there are fewer workers relative to job openings, which gives workers more leverage to negotiate higher wages. When it’s high, there are more workers relative to job openings, which tilts the balance of power towards employers.
The same dynamic applies to the housing market. When there are a lot of vacancies, renters (and buyers) have more options, which gives them more negotiating power. When vacancy rates are low, and there are more buyers per vacancy, power shifts to the landlord or seller.
Cities with High Vacancy Rates Tend to Be More Affordable
According to the above logic, cities with higher-than-average vacancy rates should be more affordable than average — which is exactly what this study found.
The Overall Vacancy Rate in the U.S. Is 11.6%
More than one out of every ten housing units in America is currently going unused.
The national vacancy rate isn’t necessarily a very useful metric, though, as vacancies are unevenly distributed around the country; for example, the rental vacancy rate in the state of North Dakota is 13.6%, while the rental vacancy rate in Vermont is 2.5%.
Cities with High Vacancy Rates Tend to Be in Busy Tourist Markets
The study found that the majority of cities with high vacancy rates are in tourism markets — suggesting that many of the vacancies are unused seasonal vacation homes.
Florida Has a Lot of High Vacancy Cities
Four out of the seven cities with vacancy rates exceeding the national rate are located in Florida, which makes sense considering that Florida is one of the largest tourist markets in the country, as well as being home to a huge number of vacation homes.
High Vacancy Rates Aren’t Always a Sign of a Strong Tourist or Vacation Market
Often, high vacancy rates are a symptom of a poor economy. For example, as recently as 2019, Gary, Indiana, a small city in the Rust Belt, had a vacancy rate of 19.4% — meaning nearly a fifth of homes there were empty.
Vacancy Rates for Rentals Are Much Higher Than for Homeowner Units
Nationally, the vacancy rate for rental units is 5.8%, while the vacancy rate for homeowner units is 1.4% — a difference of 314%. That vacancy rates for homeowner units are so low is one big reason (along with low housing inventory) that home prices have skyrocketed over the past several years.
The Most Vacant City in the U.S. Is Orlando, Florida
Orlando has an overall vacancy rate of 15.3%, with nearly 161,000 vacant housing units!
In General, U.S. Cities Are Pretty Full
Of the 50 most populous U.S. metros, 43 had an overall vacancy rate lower than the national average of 11.6%.
The Least Vacant City in the U.S. Is Minneapolis
If you’re looking for a housing market with a lot of openings, avoid the bigger Twin Cities, which has a very low vacancy rate of 4.6%.
The Homeowner Vacancy Rate Has Been Decreasing Much Faster than the Rental Vacancy Rate
Since 1965, the rental vacancy rate has decreased by 32%, while the homeowner vacancy rate has dropped by 53%, which means the homeowner vacancy rate has decreased 66% more than the rental vacancy rate. That’s likely the result of U.S. policies encouraging homeownership, as well as a general increase in basic financial education.
Both Continue to Decrease—But at Many Different Rates
From 2019 to 2022, the rental vacancy rate decreased by 17.1%, while the homeowner vacancy rate decreased by 42.8%.
That dynamic has only intensified since the beginning of the pandemic. From 2020-2022, the rental vacancy rate decreased by 12.1%, while the homeowner vacancy rate decreased by 27%.
Almost any way you look at the data, the homeowner market is getting much tighter than the rental market. Now let’s look at the ten most vacant cities in the U.S!
The Tenth Most Vacant City in the U.S. Is Phoenix, AZ
Phoenix has an overall vacancy rate of 10.22%, with a homeowner vacancy rate of 1.5% and a rental vacancy rate of 5%.
In Phoenix, Rents Are Around the National Average, and Home Prices Are Far Above Average
The average rent in Phoenix is $1,547, according to Rentcafe. That’s more or less on par with the national average, which Rentcafe puts around $1,500. This isn’t surprising considering that Phoenix’s rental vacancy rate is very close to the U.S. average of 5.8%.
The average home value in Phoenix is just over $439,000, according to Zillow. That’s far above the national average of $354,165; Phoenix’s homeowner vacancy rate of 1.5% is also slightly higher than the national average of 1.4%.
The Ninth Most Vacant City in the U.S. Is Memphis, TN
Memphis has an overall vacancy rate of 11.3%, with a homeowner vacancy rate of 1.1% and a rental vacancy rate of 8%.
In Memphis, Rents Are Much Lower Than the National Average, and Home Prices Are Much Lower Than Average
The average rent in Memphis is $1,005, which is a third lower than the national average — this makes sense, considering that the rental vacancy rate in Memphis is much higher than the national average of 5.8%.
The average home value in Memphis is just under $154,000, which is less than half the national average. This is surprising, considering the city’s homeowner vacancy rate of 1.1% is even lower than the national rate of 1.4%!
The Eighth Most Vacant City in the U.S. Is Las Vegas, NV
Las Vegas has an overall vacancy rate of 11.34%, with a homeowner vacancy rate of 1.8% and a rental vacancy rate of 8%.
In Las Vegas, Rents Are Around the National Average, and Home Prices Are Far Above Average
The average rent in Las Vegas is $1,471, which is right on par with the national average — this is somewhat surprising, considering that the rental vacancy rate in Las Vegas (8%) is quite a bit higher than the national average of 5.8%.
This is probably related to the high home prices in Las Vegas, where the average home value is nearly $448,000, which is much higher than the national average, even though Las Vegas has a homeowner vacancy rate that’s slightly higher than the national average. With elevated home prices, more people are pushed to the rental market, where increased competition pushes rents higher despite a high rental vacancy rate. The fact that Las Vegas is a major tourist destination is likely also a big factor in the city’s elevated rents!
The Seventh Most Vacant City in the U.S. Is Jacksonville, FL
Jacksonville has an overall vacancy rate of 11.87%, with a homeowner vacancy rate of 1.9% and a rental vacancy rate of 6.3%.
In Jacksonville, Rents Are Around the National Average, and Home Prices Are Far Above Average
The average rent in Jacksonville is $1,453, which is more or less equal to the national average — this is expected, considering that the rental vacancy rate in Jacksonville is only very slightly higher than the national average of 5.8%.
The average home value in Jacksonville is just over $308,000, which is lower than the national average. This makes sense, considering the city’s homeowner vacancy rate is higher than the national rate of 1.4%.
The Sixth Most Vacant City in the U.S. Is Riverside, CA
Riverside has an overall vacancy rate of 12.13%, with a homeowner vacancy rate of 1.6% and a rental vacancy rate of 4.2%.
In Riverside, Rents Are Much Higher Than the National Average, and Home Prices Are Also Far Above Average
The average rent in Riverside is $2,074, which is a lot higher than the national average — this isn’t unexpected, considering that the rental vacancy rate in Riverside is quite a bit lower than the national average of 5.8%. Fewer vacancies equal more competition, which leads to higher rents.
The average home value in Riverside is just over $646,000, which is almost double the national average. This is very surprising, considering the city’s homeowner vacancy rate is slightly higher than the national rate of 1.4%; ultimately, this shows the limits of using a single metric like vacancy rate to project a market’s affordability.
The Fifth Most Vacant City in the U.S. Is New Orleans, LA
New Orleans has an overall vacancy rate of 13.1%, with a homeowner vacancy rate of 1.5% and a rental vacancy rate of 7.5%.
In New Orleans, Rents Are Below the National Average, and Home Prices Are More Affordable Than Average
The average rent in New Orleans is $1,279, which is a good amount cheaper than the national average — this affordability is likely due to the city’s higher-than-average rental vacancy rate.
The average home value in New Orleans is over $285,000, which is a lot less than the national average. This is a pleasant surprise, as the homeowner vacancy rate in New Orleans is only incrementally higher than the national rate of 1.4%.
The Fourth Most Vacant City in the U.S. Is Birmingham, AL
Birmingham has an overall vacancy rate of 13.23%, with a homeowner vacancy rate of 1.4% and a rental vacancy rate of 8.1%.
In Birmingham, Rents Are Lower Than the National Average, and Home Prices Are Far Below Average
The average rent in Birmingham is $1,226, which is much lower than the national average — this is expected, considering that Birmingham’s rental vacancy rate is much higher than the national average of 5.8%.
The average home value in Birmingham is just over $108,000, which is far lower than the national average. This is pretty unexpected, considering the city’s homeowner vacancy rate is exactly on par with the national rate of 1.4%!
The Third Most Vacant City in the U.S. Is Tampa, FL
Tampa has an overall vacancy rate of 13.71%, with a homeowner vacancy rate of 1.9% and a rental vacancy rate of 6.9%.
In Tampa, Rents Are Higher Than the National Average, and Home Prices Are Higher Than the National Average
The average rent in Tampa is $1,834, which is significantly more expensive than the national average. This is surprising, considering the rental vacancy rate in Tampa is more than a full percentage point higher than the national average of 5.8%.
The average home value in Tampa is over $415,000, which tops the national average. As with Tampa’s rents, this is somewhat unexpected, considering Tampa’s homeowner vacancy rate is around a third higher than the national rate of 1.4%.
The Second Most Vacant City in the U.S. Is Miami, FL
Miami has an overall vacancy rate of 14.75%, with a homeowner vacancy rate of 1.7% and a rental vacancy rate of 6.4%.
In Miami, Rents Are Far Higher Than the National Average, and Home Prices Are Far Higher Than Average
The average rent in Miami is $2,132, which is far more expensive than the national average. Although Miami’s rental vacancy rate is higher than the national average, this is a very desirable rental market, and the presence of many vacant investment and vacation properties makes the vacancy rate less useful as a metric of affordability.
The average home value in Miami is just under $532,000, which is much, much higher than the national average. This is surprising, considering that the city’s homeowner vacancy rate is actually higher than the national average — but perhaps less surprising when you take other market factors into account.
The Most Vacant City in the U.S. Is Orlando, FL
The city with the highest vacancy rate on this list is Orlando, which has an overall vacancy rate of 15.27%, a homeowner vacancy rate of 3.1%, and a rental vacancy rate of 9.7%.
In Orlando, Rents Are Slightly Higher Than the National Average, and Home Prices Are Slightly Higher Than Average
The average rent in Orlando is $1,820, which is higher than the national average. You might expect the city with the most vacancies and a rental vacancy rate almost double the national average, to be more affordable for renters, but the high number of seasonal homes and short-term rentals skews the market.
The average home value in Orlando is just under $383,000, which is just a little higher than the national average. This is surprising because the city’s homeowner vacancy rate is nearly double the national average, but again, the presence of vacation homes, as well as the seasonal nature of the tourism market (and the short-term rentals that cater to them) makes Orlando a unique case.