The housing inventory crunch has sparked a dramatic increase in the number of accessory dwelling units in the U.S., most notably in high-cost areas that have seen growing populations over the last decade, Freddie Mac reports in a new study on ADUs. Freddie’s research identifies 1.4 million ADUs in the U.S., including granny flats, garage apartments, and in-law suites. These ADUs can be either attached or detached from the main residence.
Freddie Mac researchers examined 600 million MLS transactions dating back to the late 1990s to study the growth of ADUs in the country.
In 2019, 70,000 properties with ADUs were sold, which is 4.2% of homes sold on the MLS, the research shows. In 2000, only 8,000 properties with ADUs were listed and sold—or 1.1% of the total.
“The nation’s affordable housing crisis has intensified in this turbulent economic environment, and ADUs are increasingly providing a viable affordable housing option for people of all ages,” says Sam Khater, Freddie Mac’s chief economist. “This analysis is both unique and large in scale, giving us insight into the growing movement of accessory dwelling units.”
ADU demand appears to be highest in the fastest-growing areas of the country, researchers note. For example, Sun Belt states like California, Florida, Texas, and Georgia have half of the 1.4 million ADUs identified. Also, cities like Portland, Ore., Dallas, Seattle, Los Angeles, and Miami have seen some of the largest upticks—with double-digit growth--in ADUs over the last five years.
Some ADUs are turned into rentals and can serve as an income stream for homeowners. Freddie Mac says 8,000 ADU rentals were leased in 2019, which comprise 2.9% of total homes leased on the MLS.
Source: “Granny Flats, Garage Apartments, In-Law Suites: Identifying Accessory Dwelling Units From Real Estate Listing Descriptions Using Text Mining,” Freddie Mac (2020)
