New Freddie Mac Study Reveals Growing Interest in ADUs

Accessory dwelling units (ADUs) — also known as in-law suites, basement units, granny flats, guest houses, etc. — provide an opportunity to expand affordable housing options on existing property. However, because they are owned by the owner of the primary lot and legally part of the same property as the main house, the Census and most other government housing surveys do not identify them. Using the 1997-2019 Multiple Listing Service (MLS) transactions data, a new Freddie Mac study identified 1.4 million properties with ADUs in the United States. The Freddie Mac team analyzed more than 600 million MLS transactions and identified listings mentioning ADUs for the first time to estimate monthly additions to the national ADU inventory. According to the study, nearly 70,000 properties with ADUs were sold in 2019, compared with only 8,000 properties in 2000. The study also notes 8,000 ADU rentals were leased in 2019, compared with less than 1,000 rentals in 2000. This growth matches information from 2019 NAHB survey data, in which approximately one in five remodelers noted they had completed at least one ADU development project in the prior 12 months. The South and West are the fastest growing regions for ADUs, with top markets including Portland, Dallas, Seattle, Los Angeles and Miami. Natalia Siniavskaia, NAHB assistant vice president of housing policy research, provides more information in this Eye on Housing post.