The U.S. housing market continues to struggle with a severe supply gap, with a shortfall of 4.5 million homes as of 2022, according to a recent Zillow analysis. This marks an increase from 4.3 million in 2021, highlighting the growing demand for housing that far outpaces available inventory.
A Growing Mismatch Between Housing Supply and Demand
Zillow’s analysis found that in 2022, there were approximately 8.09 million “missing households”—individuals or families who were living with nonrelatives due to lack of housing options. Meanwhile, only 3.55 million housing units were available for rent or purchase, creating a widening gap.
Despite 1.4 million homes being built in 2022—the highest annual total since the early stages of the Great Recession—it still wasn’t enough. The number of U.S. families grew by 1.8 million that year, outpacing new construction.
Construction Growth Still Isn’t Closing the Gap
In 2023, home completions reached 1.45 million, according to the U.S. Census Bureau, but this still fell short of making a significant dent in the housing crisis.
With housing supply unable to keep up, affordability continues to worsen. Homeownership remains out of reach for many, and the impact extends to renters as well. Nearly half of all renter households are considered cost-burdened, spending a disproportionate share of income on rent.
What Needs to Change?
Addressing the housing shortage will require more than just maintaining current construction levels. Zoning reforms, incentives for new development, and policy changes aimed at increasing supply are essential to stabilizing the market. Until meaningful action is taken, housing costs are likely to remain high, keeping homeownership and affordable rentals out of reach for millions of Americans.
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