Thanks to years of underbuilding, the United States’ housing markets are missing somewhere between 5.5 million and 6.8 million homes.
That’s the conclusion of a new report by the Rosen Consulting Group commissioned by the National Association of Realtors, which says the shortage is threatening the basic affordability of housing in every region of the country.
“There is a strong desire for homeownership across this country, but the lack of supply is preventing too many Americans from achieving that dream,” Lawrence Yun, NAR’s chief economist, said in a statement. “It’s clear from the findings of this report and from the conditions we’ve observed in the market over the past few years that we’ll need to do something dramatic to close this gap.”
Calling the state of the nation’s housing stock “dire” and the supply-demand gap “enormous,” the report calls for “a major national commitment to build more housing of all types.”
The report’s authors recommend lawmakers must work to expand access to resources, remove barriers to and incentivize new development, and make housing construction an integral part of a national infrastructure strategy.
“A number of factors from the past 20 years are responsible for the massive housing investment gap we see in America today, but what’s important now is that we find solutions that will get us out of this crisis and provide more stability in future markets,” NAR President Charlie Oppler said in a statement. “Additional public funding and policy incentives for construction will very clearly provide huge benefits to our nation’s economy, and our work to close this gap will be particularly impactful for lower-income households, households of color and Millennials.”
Efforts to build the missing millions of houses would generate an estimated 2.8 million American jobs and $50 billion in new, nationwide tax revenue, Oppler estimated.
The NAR report was issued the same day Harvard University’s Joint Center for Housing Studies issued its own annual State of the Nation’s Housing report, which offered broadly similar conclusions.
“Housing cost burdens have also moved up the income ladder,” JCHS senior research analyst Alexander Hermann said in a statement accompanying the report’s release. “Seventy percent of renter households earning between $25,000 and $34,999 and nearly 50 percent of renters earning between $35,000 and $49,999 were cost burdened in 2019.”
A recent analysis of Census Bureau data by rental listings website Apartment List concluded that Hartford, Middlesex and Tolland counties saw some of the slowest growth in housing construction of the country’s major metro areas.
