U.S. Housing Supply Short 7.2 Million Homes

While some hot spot California cities often make lists noting housing shortages in the U.S., a new report out from Realtor.com finds that the country as a whole is short about 7.2 million homes. Experts say the build up in due to more than a decade of underbuilding relative to population growth.

In 2023, an additional 1.7 million households formed, resulting in a total of 17.2 million new households between 2012-2023. Homebuilders also started construction on 947,200 single-family homes and 472,700 multi-family homes last year. 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—the third smallest single-year gap between households and housing starts since 2016.

“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.”

At the metro-level, some areas have seen outsized household growth relative to permitting activity. The metros with the largest single-family gap include San Antonio, Austin and Daytona Beach.

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