Despite a pandemic construction boom, the U.S. housing shortage has actually grown in the last year thanks to an explosion of new household formations, according to a new analysis from Zillow.
Getting Worse: The US housing shortage expanded to 4.5 million homes in 2022, up from 4.3 million the previous year. This happened despite 1.4 million homes being built in 2022, marking the best year for home construction since the early stages of the Great Recession. However, the number of U.S. families increased by 1.8 million that year, meaning the country did not even build enough homes to accommodate the new families, let alone reduce the existing deficit.
What they’re saying: Orphe Divounguy, senior economist at Zillow, emphasized the severity of the situation:
– “The simple fact is there are not enough homes in this country, and that’s pushing homeownership out of reach for too many families,” he said. “Filling the housing shortage is the long-term answer to making housing more affordable. We are in a big hole, and it is going to take more than the status quo to dig ourselves out of it.”
The bottom line: The U.S. housing market is significantly underbuilt, and the gap between supply and demand is widening. As long as demand outpaces supply home prices will continue to rise. While this is great for current homeowners, it is a big problem for housing affordability and will ensure more families are priced out of homeownership.
