A new data analysis published by Realtor.com has determined the U.S. housing market is short of up to 7.2 million homes, a deficit fueled by more than a decade of underbuilding relative to population growth.
Realtor.com noted that an additional 1.7 million households formed last year, resulting in a total of 17.2 million new households between 2012 and 2023. However, homebuilders started construction on 947,200 single-family homes and 472,700 multi-family homes in 2023, bringing the 2012 to 2023 overall housing starts total to 14.7 million homes, of which approximately 10 million of which were single-family.
Thus, the gap between single-family housing starts and household formations grew from 6.5 million at the end of 2022 to 7.2 million at the end of 2023. And the overall gap between household formations and total housing starts – encompassing both including single- and multi-family homes – widened from 2.3 million housing units between 2012 and 2022 to 2.5 million units at the end of 2023.
“The U.S. is in a long-term housing shortage with the construction of new homes failing to keep pace with a growing population. While a recent uptick in new construction has the potential to alleviate the historically low level of homes for sale on the market today, it’s going to take some time to close the gap,” said Danielle Hale, chief economist at Realtor.com. “That said, the elevated level of both single- and multi-family construction coming to market this year is likely to put downward pressure on rent prices in many markets, welcome news for renters. It also means that the higher than usual share of new homes for sale is likely to continue, giving home shoppers willing to consider new homes more options.”
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I don’t agree with this in the least. It’s bogus. 64% of all available housing are now rentals, owned and controlled by private corporations, which the US gov. did nothing to stop when it started. They have thrown our entire economy into a mess, and again, the gov. did nothing to stop them. Builders couldn’t possibly build the number of units that these corporations own as rentals. Do we know their time line for when their tax breaks end and they put the houses on the market? Then what? A glut of homes for sale driving down the value of all housing. It’s a crime.
I agree 100% with Elaine; however, approximately 7.2 million homes are available in China!
this article failed to mention how many household are owned by old people heading to assisted living as and heaven everyday. this story is total realtor speak, and realtor script. buyers don’t believe a word of this crap.
Speaking of China, they buy our houses to safeguard their money and leave the homes vacant. They don’t care to rent them. This is a darn shame!
Elaine, the percentage of housing owned by private corporations has nothing to do with the shortage mentioned in the article. If your figures are correct, what is wrong with private corporations owning and operating rental housing? Why on earth would we want the government to stop corporations from providing housing, rental or otherwise? Your nonsense cecal reasoning has no logical basic whatsoever. If you think the government should be stopping builders from providing rental housing, maybe you should follow a thought from George F, and move to China, where Government is involved is every aspect of your life, whether you want them in it or not.. Speaking of building, Elaine, I think you might be a brick shy of a load….A half a bubble off center.
The article failed to mention the abundance of vacant commercial office buildings in markets across the country. If banks want to avoid increasing reserves and lopsided balance sheets for non performing loans, they will underwrite new loans for conversions and repurpose of these assets- primarily for mixed use with a majority dedicated to residential rentals and condominiums. The infrastructure and brick and mortar are already in place. Technically then any real housing shortages will be easily erased. The issue is affordability- the other elephant in the room the article sweeps under the rug. Rent increases have been driven by greed not a supply side imbalance. With that in mind- count the ever increasing number of homeless and tackle that- of which we know there’s no shortage.
Maybe if they close the borders, we won’t continue to have this extreme population growth thus solving the problem…
Agree!
The housing shortage is a multi faceted problem.
– wages have not kept up with inflation. My dad worked for the gas company, my mom stayed at home with us 6 kids, and they owned a 4 bedroom on 1/4 acre. That would be impossible today for a utility worker.
– the drug problem is growing. Many drug users do not want to follow the rules for shelters… including apartments set aside to help the homeless
– air bnbs are taking homes that would normally be used for housing. Not as many hotels are built for vacation destinations. I live in a town popular with tourists. It is hard to find homes for sale or long term rentals. We have a hospital in our city and have a shortage of Healthcare workers. Some hired staff decided to decline accepted job offers because they could not find housing. We have only one urgent care, the 2nd one closed for lack of staff
– the cost of home building has increased exponentially. It is hard to provide/build affordable housing. Many new home neighborhoods are not within first time homebuyers price range. My husband and I built our home in 2000, and we are in process of building our current home. The prices for materials and labor have increased drastically, making this build comparably (inflation from 2000 to 2024) a bigger percentage/ cost than inflation
– I personally see my neices and nephews unable to afford a home purchase. They have similar jobs as my generation (I’m in my 50s) but can only afford to rent
To say the housing shortage is only caused by lack of new home building is not evaluating many other factors. There are most likely other items that I have not mentioned that contribute to America’s housing shortage.