Nationwide Housing Shortage Of 7.2M Homes

Housing shortage
A housing shortage continues to provide some headwinds for home buyers.

The American dream of home ownership might be getting further out of reach for many. A recent report by Realtor.com indicates a staggering housing shortage across the country – a gap of up to 7.2 million homes. Of course, this housing shortage has been building for over a decade, fueled by under-building relative to population growth.

A decade of under-building leads to housing shortage

For over a decade, the number of new homes constructed hasn’t kept pace with the growing population. In 2023 alone, 1.7 million new households formed, adding to the existing demand. While construction has seen an uptick, it hasn’t been enough to bridge the gap.

The report highlights a specific issue with single-family homes. The gap between single-family housing starts and new household formations has widened to a substantial 7.2 million. This means there simply aren’t enough single-family homes being built to meet the needs of a growing population looking to establish roots.

What the housing shortage means for buyers and sellers

For Buyers: A limited supply of homes, coupled with high demand, has pushed housing prices upwards. This can make it difficult, especially for first-time buyers, to find affordable options. Additionally, competition for available homes can be fierce, leading to bidding wars and frustration for potential buyers.

Needless to say, it is critical for buyers to be represented by a trusted and knowledgeable buyer’s agent in this market. In addition to knowing the local market, a buyer’s agent will also be able to navigate you through various steps of the home buying process to potentially avoid costly mistakes.

For Sellers: Although we have seen a slight uptick in new construction and the inventory of homes for sale improving some, the current market is still defined by a low inventory of homes for sale. As a seller, it is important to work with a local and knowledgeable real estate agent to properly price and market your home for sale. Although current economic pressures such as higher interest rates and inflation have resulted in fewer prospective buyers, a properly priced and marketed home can sell quickly.

Summary

Addressing the housing shortage will require a multi-pronged approach. Streamlining permitting processes, incentivizing builders to focus on affordable housing, and exploring alternative housing models could all play a role. It’s also important to consider the regional variations within the shortage. Sunbelt states, for example, are experiencing faster population growth and may require even more focused efforts to increase housing supply.

The current situation highlights the need for long-term solutions to ensure a healthy housing market that caters to the needs of a growing population. Whether you’re a homeowner, renter, or aspiring buyer, staying informed about this issue is important. It will continue to impact the housing market and the broader economy for years to come.

Are you thinking about buying or selling real estate in the South Florida area? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download the free Florida Home Search app for your smartphone or tablet.

By natasha moore

REALTOR® with Live South Florida Realty, Inc.