Vacancy rates may hide a housing shortage in New England

A high housing vacancy rate doesn’t necessarily mean there are a lot of homes available for people looking to buy or rent, especially in vacation destinations.

New LendingTree Analysis U.S. Census Bureau data (2024 American Community Survey) found that many homes counted as “vacant” in northern New England are actually seasonal or recreational properties, leaving relatively few available for year-round residents.

Vermont had the nation’s highest share of vacant homes used for seasonal, recreational or occasional purposes at 75.8 percent, followed by Maine at 74.4 percent and New Hampshire at 70.5 percent. These were the only three states where more than 70 percent of vacant homes fell into this category. In Massachusetts, the share was much lower at 45.8 percent.

In total, the report found that 14.5 million homes across the United States are vacant.

The report also found that Vermont, Maine and New Hampshire have the lowest shares of vacant homes available for rent in the country: 3.5 percent, 4.4 percent and 6.9 percent, respectively. Massachusetts ranked higher, at 15.5 percent.

The three northern New England states also had the lowest percentages of vacant homes for sale, ranging from 1.9 percent in New Hampshire to 2.1 percent in Vermont. Massachusetts came in at 4 percent, still among the lowest rates in the country.

Matt Schultz, senior consumer finance analyst at LendingTree, said the results show why high vacancy rates are misleading.

“All of these vacancies can be a challenge because if a lot of inventory in your area is vacant and unavailable, it can drive up the costs of homes and even rents,” Schultz said. “This is the last thing anyone needs.”

With so few vacant homes on the market, buyers and renters face less inventory, stronger competition and higher prices, Schulz said.

Housing economists often use vacancy rates as a measure of supply and demand. In general, high vacancy rates can indicate weak demand or oversupply of homes, while low vacancy rates often indicate a tightening housing market. A vacancy rate of 7 to 8 percent is typically considered balanced, according to LendingTree.

However, the report finds that vacancy rates alone do not tell the whole story. The U.S. Census Bureau classifies a home as vacant if it is vacant and habitable, regardless of why it is vacant. In states with large numbers of second homes or vacation properties, these homes inflate vacancy rates without increasing the year-round housing supply.

Vermont illustrates this disconnect. While nearly three-quarters of vacant homes in the state are used seasonally or recreationally, by 2025 Vermont Housing Needs Assessment It found that the state still needs an estimated 24,000 to 36,000 additional homes over the next five years to keep up with demand. The report warned that without more housing, house prices and rents are likely to continue to rise.

Other parts of the country tell a different story. In the District of Columbia, for example, nearly 40 percent of vacant homes are available for rent, the highest percentage in the country, making these vacant homes more likely to help relieve pressure in the housing market.

“When a large percentage of vacant homes are seasonal or recreational properties, it doesn’t necessarily help local families looking for housing because those homes aren’t typically available year-round,” Schultz said. “This is very different from vacancies available for rent or sale, which can relieve pressure on the market and give consumers more options.”

This difference is one reason Schulz says housing markets can vary greatly from one part of the country to another.

“It’s important to understand people for whom owning a home is a really big priority,” Schultz said. “If they have the flexibility to be able to move, that can open up some opportunities for them. Obviously, that’s a big thing, because there are a thousand other things that determine whether you can move or not.”

Beth Trevesen is a general assignment reporter for Boston.com, focusing on local news, crime and business in the New England region.