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A decade of under-building has left America short 3.8 million homes, according to Realtor.com’s latest market report.
At the current building pace, it would take 7.5 years to close the nationwide gap. However, regional inventory trends show the distance to fulfill housing demand is longest in the Northeast and Midwest, and shortest in the West and South.
Danielle Hale
“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,” Realtor.com Chief Economist Danielle Hale said in a statement. “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.”
In 2024, single-family home completions reached a two-decade high of 1.36 million. That number outpaced household formation trends for the year, which barely topped 900,000. On the multifamily side, builders have pulled the reins on developing high-density projects as vacancy rates finally show signs of improvement after two years of increases.
Despite improving trends, it’s still not enough to meaningfully improve affordability trends for homebuyers, who are paying a median price of $446,300 for new builds and a median price of $396,900 for existing homes. Millennials and Gen-Zers are particularly struggling to keep up, the report said, with those generations of potential homebuyers unable to form their own households.
The housing gap is on track to be closed in within the decade in the South (three years) and West (6.5 years). However, it will take a whopping 41 years for builders in the Midwest to fully meet demand. The Northeast has the dimmest outlook, with the gap continuing to grow 1.2 percent larger annually.
“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,” Hale said.
Damian Eales | Credit: Realtor.com
Realtor.com is prepared to help tackle this challenge head-on, with CEO Damian Eales announcing the launch of the portal’s “Let America Build” campaign at SXSW on Monday.
The campaign focuses on collaborating with lawmakers, homebuilders and housing advocates to create modern zoning policies that align with today’s inventory challenges.
“America’s housing shortage is holding back economic growth, driving up costs, and making it harder for millions of families to find a home,” Eales said in a prepared statement. “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,” he added.
