Vacancies and Rural Housing Costs

It has been my experience there is a difference in housing vacancy rates between rural areas and cities. It can vary by climate. Florida becomes more populated as people head so. But then so does Wisconsin as people head north to ski. The same holds true for Summer as people escape the heat of the Summer. In other words, what appears to be vacant, may not be vacant and just not occupied. Read on, a good piece by The Daily Yonder.

“In rural America, housing vacancy rates are a complex measure that can point to seemingly contradictory phenomena.“

“What Do Vacancies Tell Us About Rural Housing Costs? It’s Complicated,” The Daily Yonder, October 1, 2025

Experts often use housing vacancy rates as one of several measures to examine the state of an area’s housing market. In rural America, a high vacancy rate can point to low housing demand and therefore lower housing costs, but that’s not always the case.

Let’s take a look at what the data says.

An estimated 19% of all housing units in nonmetropolitan, or rural, counties are vacant, compared to only 8% in metropolitan areas and 10% in the United States at large, according to my analysis of data from the Census Bureau.

The intuitive relationship between housing vacancies and costs is that prices tend to rise as vacancies fall. This pattern is often seen in metropolitan areas, where high demand from growing populations drives competition for limited housing. Low vacancy rates in cities can signal shortages and, consequently, higher prices. However, this relationship does not always hold, and the connection can be more complex than it appears, especially in rural areas.

In nonmetro counties with economies dependent on recreation, a larger percentage of the housing stock is allocated towards seasonal use compared to rural counties with economies dependent on other industries. In rural recreation areas, housing costs, measured as the share of one’s earnings spent on mortgages or rent, are higher, despite the relatively high housing vacancy rates.

This map shows the estimated share of housing units that are vacant in nonmetropolitan, or rural, counties. States that have popular rural recreation destinations, like Massachusetts, Colorado, Michigan, and Alaska, have some of the highest housing vacancy rates. In rural Massachusetts, for example, the vacancy rate in rural counties is nearly 32%. 

This data is from the American Community Survey’s five year estimates between 2018 and 2023. In this dataset, vacancy can refer to houses that are either chronically or temporarily vacant, including those that are strictly for seasonal use and those that are temporarily vacant while they sit on the market.

(I aggregated the nonmetro data into a state-level map because many rural counties have high margins of error, making much of the individual county data unusable.)

Does Second Homeownership Drive Housing Costs?

In rural amenity-rich destinations, high vacancy rates often point to high rates of second homeownership and therefore local desirability. In these places, high vacancy rates are not signs of economic stagnation and population decline, but often just the opposite. 

While 27% of the vacant units are second homes in metro counties, 47% of the vacant units in nonmetro counties are second homes. Keep in mind that second homes can vary by use, value, and size. Second homes can range from one-room hunting cabins to multi-million dollar beach houses.

I live in western North Carolina, an area known for outdoor amenities like hiking, biking, rafting, and fly fishing, among other things. I often hear fellow renters like myself complain about the lack of long-term rentals on the market while million-dollar log cabins sit empty for half the year or more. And while this is a valid concern, the research on rural second homeownership shows that the relationship between housing costs and second homes is not as straightforward as one might think. 

In May of 2020, Headwaters Economics, an independent nonprofit research organization, published a report that explored the complex relationship between second homeownership and housing affordability. The authors measured housing affordability by taking monthly housing costs and dividing it by monthly earnings. 

While the Headwaters report does point to a statistically significant relationship between second homes and earnings spent on mortgages or rent, the effect was small. A 10% increase in the share of housing units that are second homes only resulted in a 0.4% increase in earnings spent on mortgages and a 0.3% increase in earnings spent on rent in nonmetropolitan counties. 

But it’s unclear to me which way the relationship is moving. Do second homeowners increase housing costs by increasing housing demand? Or are second homeowners already attracted to places that tend to have higher demand? I’m not quite sure. 

The Headwaters report found that the rate of net migration, not the rate of second homeownership, was the variable with the strongest effect on monthly earnings spent on rent and mortgage: 10% and 7%, respectively.

“This study demonstrates that less affordable housing often goes hand-in-hand with economic growth and prosperity,” wrote Megan Lawson, the author of the report.

As rural places develop robust economies that drive prosperity and growth, they become more desirable to everyone – second homeowners and long-term residents alike. This economic activity and population growth contributes to less housing affordability.