A new White House economic report is putting a fresh spotlight on the U.S. housing shortage, concluding the country is short at least 10 million single-family homes. But how large that gap actually is remains an open and heavily debated question.
Recent estimates from researchers and housing analysts range anywhere from roughly 1 million to 10 million homes, a gulf that can leave consumers and real estate professionals struggling to make sense of the problem.
Rick Palacios Jr., research director at John Burns Research and Consulting, pushed back on the White House’s math this week, saying on X that the 10 million figure “far exceeds” other estimates he’s seen. His firm currently puts the gap at roughly 1 million homes, he added.
Rick Palacios
The wide difference in shortage estimates isn’t necessarily due to sloppy math, but rather comes down to the more fundamental question of what exactly researchers are trying to measure.
“There’s no real agreement about what the housing shortage actually means,” Eric Finnigan, vice president of demographics research at John Burns Research and Consulting, told Inman. “If you asked 10 people at a housing conference, they’d all have their own concept of it.”
The White House estimate — from the Council of Economic Advisers’ latest Economic Report of the President — has a different calculus. In it, researchers looked at how many more single-family homes would exist today if builders had kept up their pre-2008 pace instead of pulling back after the housing crash. That perspective makes it more of a measure of how much building we missed out on, not what’s actually available in today’s market.
By contrast, estimates from John Burns Research and Consulting are focused on the present — specifically, whether there are enough homes available today for people actively looking to move.
A narrower, real-time view of supply
John Burns Research and Consulting’s estimate — currently about 1 million homes — is based on vacancy rates rather than long-term projections of housing need, Finnigan said.
Eric Finnigan
The firm analyzes U.S. Census data on homeowner and rental vacancy rates and compares today’s levels to what it considers a “normal” period between the mid-1990s and early 2000s. When vacancy rates fall below that historical baseline, it signals that there aren’t enough available homes for people actively looking to move.
In practical terms, that imbalance changes how the market behaves.
“If there are 100 people searching for homes and only 50 available, prices are going to do something very different,” Finnigan said. “Some people won’t move, and others will bid up prices.”
This approach measures whether there are enough homes for people looking to move today, not households that might form under different conditions.
By that measure, both rental and for-sale vacancy rates remain below normal today — indicating a shortage — but not on the scale suggested by some higher-profile estimates.
The firm’s latest estimate has also been shrinking, he said, falling from about 1.1 million homes a year ago to roughly 1 million in recent months as new construction has picked up and household formation has slowed slightly since 2022.
Why some estimates run higher
Some estimates take a broader view by trying to capture pent-up demand, or households that don’t yet exist because of affordability constraints. Others focus on long-term underbuilding.
The White House report itself notes that its 10 million figure is broadly in line with other estimates that use different methods to measure a shortage of several million homes. But those figures don’t line up neatly. The White House is modeling missing single-family homes, while other estimates look at total housing units or include multifamily supply and population trends.
For example, Realtor.com researchers recently estimated the U.S. housing supply gap to be around 4 million homes, based on the relationship between new construction, household formation and pent-up demand.
Some models also factor in “missing households.” Finnigan noted that about 18 percent of adults ages 25 to 34 live with parents today, compared to closer to 10 percent historically. Some researchers treat that gap as unmet housing demand.
Those approaches are answering a different question — they are not measuring whether the market is short of homes today, but how many households might form if housing were more accessible.
Supply isn’t the only constraint
But even the 1 million figure comes with important caveats.
A shortage isn’t just about volume. It also depends on whether homes exist in the right places and at prices people can afford.
“If you drop a million units at $1.5 million each, they’re going to sit vacant,” Finnigan said.
That mismatch is playing out across different markets. Parts of the Sun Belt, including metros like Nashville and Austin, have seen a surge in new construction and are now dealing with elevated inventory and softer rents. Meanwhile, much of the Northeast and Midwest, where building has lagged, continues to see tighter conditions and stronger price growth.
“It can feel like there’s too much housing in some markets and not enough in others,” Finnigan said.
More striking, perhaps, is where Finnigan thinks the debate is heading. JBREC’s shortage estimate has been cut by more than half over the past two years, he said, and could disappear entirely within a couple of years by the firm’s calculations — yet that alone won’t solve the problem most Americans actually feel.
“The price of homes today is, I think, the bigger issue than the lack of supply,” Finnigan said. “It’s not going to help people live in homes that they want to live in and places where they want to live” — not unless prices fall, mortgage rates come down or incomes rise significantly.
Which is why, when confronted with a headline shortage figure, the more useful question may be not how many homes are missing — but how many are realistically within reach.
