US home vacancy rate sinks to lowest level since 2006, spurring construction
The US home vacancy rate, a measure of properties that are empty and for sale, dropped to the lowest level since 2006 as demand increased and house prices slowly recovered.
The rate sank to 2.1 percent in the second quarter compared to 2.5 percent in the second quarter of 2011, according to a report by the Department of Commerce’s Census Bureau. Vacancies peaked at 2.9 percent in 2008, during the recession.
The inventory of available homes is shrinking as investors purchase more discounted foreclosures, Bloomberg reported. As a result, builders are breaking more ground on new projects to meet demand from residential buyers; housing starts increased 6.9 percent in June from May, the highest rate since October 2008, the Commerce Department reported.
The lower vacancy rate “means builders will have another reason to start ramping up on construction,” IHS Global Insight economist Patrick Newport told Bloomberg. “The reason home construction has been so low since 2009 is because so many people moved back in with their parents. The household formation rate just dropped sharply so we didn’t need to build a lot of homes.”
For the second quarter of this year, the homeowner vacancy rate was lowest in the Northeast, at 1.7 percent. The homeowner vacancy rates in the Northeast, Midwest and South decreased year-over-year, while the rate in the West remained roughly the same.
For the rental market, the South had the highest vacancy rate at 11 percent. The Northeast and West had the lowest rates of 6.7 percent and 6.2 percent, respectively. The national rate was 8.6 in the second quarter, the lowest since the same period in 2002.