According to a recent analysis by Realtor.com, the U.S. is experiencing a scarcity of around four million houses as a result of more than ten years of underbuilding. This ongoing supply deficit is making homeownership more and more unaffordable for millions of Americans as rents and property prices push budgets to their limits. Realtor.com is launching “Let America Build“, a nationwide campaign that promotes solutions that increase the supply of housing, to address one of the largest obstacles to affordability.
Although recent improvements in construction demonstrate progress, they also underscore the pressing need for decisive legislative action. According to a recent analysis by Realtor.com, a rise in single- and multi-family building drove home completions to reach 1.6 million in 2024, the greatest level in almost 20 years. Household formations were surpassed by new construction activity for the first time since 2016. However, there is still a 3.8 million house shortage in the country, which is the third-largest yearly gap since 2012, after 2020 and 2023. With the South catching up in three years, the West in 6.5 years, the Midwest in an astounding 41 years, and the Northeast making little to no progress, bridging the deficit at the 2024 pace would take 7.5 years.
| 2024 | Northeast | Midwest | South | West |
| Household Formations (Ths.) | -28 | 191 | 552 | 283 |
| Housing Starts (Ths.) | 125.3 | 184.8 | 751.2 | 302.8 |
| Pent-Up Demand (Ths.) | 580 | 195 | 660 | 268 |
| Supply Gap (Ths.) | -1,044 | -843 | -1,150 | -830 |
| Annual % improvement | 1.2% larger | 2.4% smaller | 24.9% smaller | 13.4% smaller |
| Years to Close Gap | Growing | 41 years | 3 years | 6.5 years |
Rising housing costs combined with a shortage of available housing have prevented many young individuals from starting new households, even though more homes were started last year. An estimated 1.63 million “pent-up” households did not exist in 2024 as a result of many Millennials and Gen Zers choosing to live with family or roommates instead. These households are crucial to comprehending the problem because they add to the almost 4 million-person housing supply shortfall, which emphasizes the unmet demand for housing.
“While builders made strides last year, the scale of the historic housing shortage, paired with strong pent-up demand, meant that new supply couldn’t fully close the nearly 4 million-home gap,” said Danielle Hale, Chief Economist for Realtor.com. “Young households are particularly feeling the strain, as buying a home on an early- to mid-career salary is increasingly out of reach for many. Though a rise in both multi- and single-family construction offered some relief amid low existing inventory, addressing the gap will take sustained effort and smart policy.”
Realtor.com Unveils New Campaign for Americans
The nationwide “Let America Build” campaign by Realtor.com is promoting solutions that bypass antiquated laws, restricted zoning, and bureaucratic red tape that are impeding the construction of the homes that America needs. The campaign urges legislators at all levels to take decisive, pro-building positions. In order to promote concrete change that will enable the construction of more homes—more quickly—Realtor.com seeks to collaborate with some of the largest leaders in the industry, such as builders, legislators, and housing activists.
“America’s housing shortage is holding back economic growth, driving up costs, and making it harder for millions of families to find a home,” said Damian Eales, CEO of Realtor.com. “Through Let America Build, we’re rallying the right voices to push for real solutions that will unlock supply and make homeownership more attainable. That’s a win for families, communities, and the entire economy—because when housing works, everything works.”
Recent construction data indicates some progress as advocates, industry executives, and legislators debate how to alleviate the housing shortfall. According to a Realtor.com research, in 2024, new home development exceeded household formations for the first time since 2016. In 2024, fewer than 1 million new households were created, which is the lowest yearly growth rate since 2016. In the meantime, 1.36 million new homes were built, which is almost 400,000 more than the number of households that were formed. While single-family housing starts jumped to their second-highest level since 2007 as builders increased production to address the shortage of existing homes on the market, total housing starts were at their lowest level since 2020, despite surpassing household formations. This was primarily due to a slowdown in multi-family construction.
Last year, multi-family housing starts dropped to their lowest level since 2017, despite an increase in overall home completions. In response to a post-pandemic rental market glut, builders withdrew their construction after years of robust multi-family activity, especially in high-density complexes. This probably portends a slower rate of new multifamily rental construction that will soon be finished. Nevertheless, the rise in single-family and multi-family completions contributed to the overall increases in inventory.
Regional differences in housing supply were significant. The South still has the biggest deficit in terms of volume, requiring 1.15 million units, but it saw the biggest advances in 2024, with the gap closing by 24.9%. The West’s achievement in closing the housing gap by 13.4% was aided by modest household formation and respectable levels of new development. Only slight progress was made in the Midwest, where the disparity decreased by 2.4%. The Northeast, on the other hand, was the only area where the disparity increased, increasing by 1.2% year-over-year and requiring 1.04 million units.
To read the report, click here.
