A new Zillow study of recently released Census data shows that America’s housing deficit has reached an all-time high of 4.7 million units. The primary cause of the country’s home affordability crisis is still this widening housing shortfall.
The early years of the epidemic saw a boom in construction due to increased demand and price increases. However, that hasn’t been sufficient to meet the demands of the expanding population, much less reverse the nearly two decades of underbuilding that began during the Great Recession.
“The unfortunate fact is that we still don’t have enough housing in this country for people who need it. Construction has helped prevent the housing deficit from ballooning, but it hasn’t yet begun to close the gap,” said Orphe Divounguy, senior economist at Zillow. “We know what works: lower building restraints to allow for more density and less expensive housing. More of these measures at the local level can help get more homes built and begin to ease this outsize financial burden for millions of Americans.”
According to Census data, 3.4 million residences were unoccupied and for sale or rent in 2023. In the meantime, 8.1 million families had non-family members living with them. The majority of these families would likely prefer their own home if one were available that they could afford, even though some people decide to live with roommates.
Even if mortgage rates are marginally lower than they were a year ago, purchasing a home is still expensive, particularly for first-time purchasers. In 2019, a family with the median household income could purchase a normal home; now, they would require an increase of $17,000.
| Metro Area | Housing Deficit (2023) | Change in Housing Deficit YoY | Change in Available Units YoY (%) | Raise needed for median-income family to afford a mortgage on a typical home at 20% down |
| U.S. | 4,699,836 | 159,063 | -2.8 % | $17,670 |
| New York | 402,361 | 12,437 | -3.2 % | $99,343 |
| Los Angeles | 338,750 | 2,022 | 0.9 % | $149,375 |
| Chicago | 106,522 | 9,143 | -9.4 % | -$187 |
| Dallas | 49,204 | 1,054 | 1.9 % | $17,448 |
| Houston | 20,164 | 136 | 2.3 % | $6,304 |
| Washington, DC | 132,238 | (983) | -3.1 % | $26,513 |
| Philadelphia | 81,448 | 8,580 | -4.7 % | $16,344 |
| Miami | 71,966 | 5,022 | -4.5 % | $59,379 |
| Atlanta | 66,323 | 780 | 2.6 % | $14,735 |
Home Construction Boom Gives Buyers More Options
Although it isn’t reversing it, a five-year spike in home construction has helped limit the housing deficit’s expansion. In 2023, the housing shortfall increased by 159,000 homes, which was less than the 257,000-home surge in 2022.
In 2023, the overall number of dwellings in America increased by 1.4 million, compared to 1.3 million the previous year. This deducts destroyed units and includes newly constructed units. Compared to 2022, fewer new families had to share a home, even though the overall number of families also rose.
In 2023, homebuilders finished 1.45 million apartments, and in 2024, they finished 1.63 million units, setting new milestones since 2007. In regions with less building limitations, builders reacted more quickly to the pandemic-era surge in demand, according to Zillow Research. Compared to areas with stricter rules, this has helped those metros balance their markets more quickly and lessen price and rent rise.
Most experts concur that one of the best methods to increase home affordability is to modify zoning regulations to increase density. Both tenants and homeowners generally approve these policies. Millions of new houses might be built in the nation’s biggest areas with even a little increase in density.
For this reason, Zillow supports state-level policies that loosen zoning regulations for affordable housing and higher-density “missing middle” housing, such as triplexes, duplexes, and ADUs.
With 38% of families “doubling up” in 2023, millennials are the generation most likely to live with non-relatives, followed by Gen Z (29%), Gen X (17%), baby boomers, and older generations (16%).
The biggest housing deficits are found in New York, Los Angeles, Boston, San Francisco, and Washington, DC, out of the 50 greatest major metro areas.
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