With just 1.4 million homes started last year, the market is short by 3.8 million housing units
March 11, 2025
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Despite an uptick in new-home construction, it could still take more than seven years to meet the current demand for housing.
The housing shortage isn’t expected to go away anytime soon. According to a report from housing market platform Realtor.com, it could take more than seven years to resolve the U.S. housing shortage at the current pace of construction. As of 2024, 3.8 million housing units are needed to meet demand, but just 1.4 million units were started last year.
The lack of available new homes was aided partially by the fact that there were fewer new household formations. New-home construction outpaced household formations for the first time since 2016. Around 1.6 million expected Generation-Z and Millennial households did not form last year, largely due to a lack of affordable housing.
Total demand has outpaced new home construction in each year since 2013, when there were 1 million more new units built than the sum of new households and pent-up demand.
Although the supply gap improved in 2024, it is still the third-largest annual gap since 2012, behind 2020 and 2023.Read more
