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The housing shortfall and associated affordability crisis in the U.S. are undisputed. The growing number of Americans struggling to afford a home or to pay their rent has been widely reported. But while most experts agree that the deficit of homes is at the core of the nation's affordability woes, estimates of just how big the shortfall is vary widely.
For example, the National Association of Home Builders estimate the U.S. needs 1.5 million housing units (2021), Freddie Mac says the disparity is 3.8 million (2020), and the National Association of Realtors puts the number at 5.5 million (2021). And for households with the fewest resources, the number is even higher (7.3 million units).
The Joint Center for Housing Studies of Harvard University looked at why housing estimates vary so widely.
... The National Association of Home Builders’ (NAHB) estimate of 1.5 million units, the lowest on the list, calculates the difference between the current number of vacant units for-rent or sale and the total that would exist under ‘normal’ vacancy rates for each metro in the country, defined as the long-term average rates. The NAHB estimate is a sum of all US metropolitan areas, which may partly explain why it is lower. Unlike the NAHB number, the other two estimates also cover non-metro areas. NAHB’s methodology differs further by limiting the shortage calculation to vacant units for-rent or sale, excluding other types of vacant units such as seasonal or second homes.
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