Wanted: 3.3 million homes. More than half of all states are experiencing a housing shortage, and it is getting worse, according to a report by Freddie Mac. The shortage has captured a wave of recent headlines, but if someone wants to understand how the shortage began, they would have to go all the way back over a decade to the housing market crash. Although the home building industry has made strides after the devastation of the Great Recession, there are still open wounds yet to heal. Take the labor shortage, for example: Immigrants who were making careers in construction left as building companies folded, and the labor pool has not recovered. Despite these setbacks, however, positive signs such as increased permit applications give hope that the industry will slowly close the gap between supply and demand.
America’s housing market is undersupplied by 3.3 million units, and the shortage is getting worse every year, Freddie Mac said in a report on Friday.
“New housing supply is not keeping up with rising demand,” said Sam Khater, Freddie Mac’s chief economist, who said the shortage is increasing by about 300,000 units a year as homebuilders fail to keep up with demand.
Oregon is the most under-supplied state, followed by Colorado, Florida, and California, Khater said. The next two states are a bit of a surprise: Minnesota and Texas, where land shortages are not an issue.
“More than half of all states have a housing shortage, and the shortage is no longer concentrated in coastal markets but is spreading to the middle of the country in more affordable states like Texas and Minnesota,” Khater said.