what is a vacancy rate 
the vacancy rate is the percentage of all available units in a rental property such as a hotel or apartment complex that are vacant or unoccupied at a particular time a vacancy rate is the opposite of the occupancy rate which is the percentage of units in a rental property that are occupied high vacancy rates indicate that a property is not renting well while low vacancy rates can point to strong rental sales in addition to being used for real estate analysis vacancy rates can also be applied to the employment sector understanding vacancy ratesvacancy rates are a very important determinant for property owners because they tell them how their buildings are performing when compared to the area s vacancy rate these rates are also economic indicators as they paint a portrait of the broad market conditions in real estate the vacancy rate most often represents units that are vacant and ready to be rented units that have been turned off upon the exit of a tenant and units that are not currently rentable because they are in need of repairs or renovations low vacancy rates are considered positive because it generally means people want to live in a particular area or building while higher rates mean the opposite low vacancy rates mean there are more occupied units while high vacancy rates indicate people do not want to live in a certain building or area the rate is calculated by taking the number of vacant units multiplying that number by 100 and dividing that result by the total number of units the vacancy rate and occupancy rate should add up to 100 so if an apartment building has 300 units and 30 units are unoccupied it means the vacancy rate is 10 in order to be used effectively vacancy rates for one property should be used to compare to a similar one it is not a fair comparison when putting a commercial office building next to a three story apartment complex similarly there may be different factors at play between vacancy rates for a small town and a major city so these two areas may not be suitable to compare together real estate vacancy rate analysisa property owner can use vacancy rates as an analytic metric changes in the percentage of vacant units versus occupied units the length of time occupied units are remaining active or other rental conditions can provide guidance on how competitive a property owner has made the property if a property owner charges significantly more or less than the rest of the rental market this may be reflected in the overall vacancy rates it can also provide information about the effects of price changes or advertising on unit occupancy while vacancy rates are commonly used to assess an individual property s performance such as a hotel monitoring its nightly vacancy rate aggregate vacancy rates are also used as economic indicators of a real estate market s overall health many firms that service the commercial real estate sector gauge the strength of the overall industry using metrics such as vacancy rates rental rates and construction activity in may 2019 real estate firm jones lang lasalle reported that the u s real estate market continued to maintain its steady trends from 2018 with vacancy rates near historic lows according to the report office market vacancies hit about 5 in the year s first quarter in the previous year the firm projected a development boom that would outpace occupancy gains despite strong overall demand in the nation s office market of the largest metropolitan regions in the country san francisco s office market boasted the lowest vacancy rate in 2018 according to the data at only 8 1 new york s westchester county meanwhile registered the highest vacancy rate at 24 9 residential vacancy datathe u s census bureau compiles its residential vacancy data in a quarterly report that provides three key figures the rental vacancy rate homeowner vacancy rate and homeownership rate in april 2019 the bureau reported national vacancy rates at 7 for rentals while homeowner vacancy rates sat at 1 4 for the year s first quarter both figures have remained fairly sustained in recent years after falling from all time highs reached during the u s housing crisis when rental vacancies peaked at 11 1 in 2009 and homeowner vacancies peaked at 2 9 in 2008 the u s census bureau also collects data for the quarterly report regarding rental prices and property information much like data for commercial property markets this information can be used in conjunction with other information to help determine the health of an economy s residential real estate market by examining changes in the number of units available and the average prices of available or occupied units investors and vacancy ratesas noted above vacancy rates play a big part in business and can help investors determine whether they re making a good move by putting their money into certain real estate deals for example someone considering a large apartment complex as an investment may want to look at the building s vacancy rate before signing a contract by comparing that building s vacancy rate with other comparable properties in the area the investor can determine its performance and decide whether it s worth purchasing vacancy rates in employmentin employment the vacancy rate applies to the number of open positions a company currently has in comparison to the total number of positions available throughout the company in other words an employment related vacancy rate can indicate the proportion of positions a company has allocated for the performance of certain duties that do not currently have an employee functioning in that space 