Water withdrawals for residential use in the US exceeded 14.8 trillion gallons in 2000. There is ample evidence that, at least in certain regions, current water demand is not sustainable. What is the potential for reduced residential demand in the United States? This paper examines this question by developing and applying a rational use scenario in which present consumption is examined against water conservation opportunities that would make economic sense to users. Optimal technologies applied to present patterns of use by residential household type are analyzed and the total water avoidance is presented as a function of effective consumer discount rate and cut-off cost effectiveness ratio. Results indicate a potential avoidance of approximately 3 trillion gallons per year.