Interest Rate Roundup

Friday, July 28, 2006

Home vacancy rate at highest level ever

It's an obscure stat, but one that's important nonetheless: The homeowner VACANCY rate hit 2.2% in the second quarter, the highest in U.S. history (the Census Bureau has been tracking since 1956).

This is the result of all the real estate speculation. In short, too many homes were built for too many speculators who never intended to live in them. Now, there's a massive supply glut of residential units. It's also one reason I'm skeptical the recent surge in apartment rents will last.

Too many of these speculators will not be able to sell, so they're going to have to rent instead. Put another way, while there hasn't been a big rise in the construction of traditional apartment buildings, the overall housing stock (including single-family and townhomes) has skyrocketed. Some food for thought given the fact apartment Real Estate Investment Trusts (REITS) have been so hot lately.


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