Anyone searching for a home today knows full well the pickings are slim. The supply of U.S. homes for sale is near a record low, and the gap between supply and demand is widening.
The U.S. is short 5.24 million homes, an increase of 1.4 million from the 2019 gap of 3.84 million, according to new research from Realtor.com.
The U.S. Census found that 12.3 million American households were formed from January 2012 to June 2021, but just 7 million new single-family homes were built during that time.
Single-family home construction has suffered from a severe labor shortage that began well before the pandemic but was then exacerbated by it. Supply chain disruptions in the past year have pushed prices for building materials higher, and as pandemic-induced demand soared, prices for land increased as well.
While new household formation is actually slower than it was before the pandemic, homebuilders would have to double their recent new home production pace to close the gap in five to six years. A new household can be either owner-occupied or rented.
America is short more than 5 million homes, and builders can't make up the difference
The supply of homes for sale is near a record low, and the gap between supply and demand is widening as homebuilders struggle to keep up.
I wish there would be a federal investment in housing so that we can reach an equilibrium in supply and demand. This inventory shortage is destroying people in coastal cities. How do you think we can fix it?