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Key Takeaways
- The U.S. had 4.5 million fewer homes than needed in 2022, up from a 4.3 million shortfall in 2021, according to new analysis from online real estate firm Zillow.
- The housing shortage has been brewing since the housing market crash of the Great Recession. It has increased housing costs and hurt the economy in many other ways.
- Experts say more home construction and less restrictive zoning laws in municipalities could help ease the problem.
America’s chronic housing shortage, which has pushed up rents and home prices to increasingly unaffordable levels, is getting worse by the year.
That’s according to a newly published analysis by online real estate firm Zillow, which found that the U.S. had 4.5 million fewer homes than it needed in 2022, up from 4.3 million in 2021, as the population has increased much faster than the housing supply.
Economists have blamed the under-building of homes since the Great Recession for a host of economic woes, from the obvious— higher rent and housing costs —to the farther-flung, such as making the job market less efficient because it’s hard for workers to move to pursue the jobs that best suit them.
“The simple fact is there are not enough homes in this country, and that’s pushing homeownership out of reach for too many families,” Orphe Divounguy, senior economist at Zillow, said in a press release Tuesday. “Filling the housing shortage is the long-term answer to making housing more affordable. We are in a big hole, and it is going to take more than the status quo to dig ourselves out of it.”
More Houses Need To Be Built to Meet Demand
Zillow calculated the housing shortfall by measuring how many people were living with roommates versus the number of homes available to rent or buy. There were 8.09 million people living with non-relatives, and 3.55 million units available, leaving a gap of 4.5 million.
While homebuilders have ramped up construction to meet this demand, they’ve faced challenges including rapidly rising costs for labor and building materials . Many economists and politicians also blame local zoning laws in municipalities across the country, which restrict new home construction.
In 2022, builders completed 1.4 million homes, according to Census data. That was short of the 1.8 million new families that formed that year, Zillow researchers said, citing Census data.
The housing shortage has hurt homebuyers by pushing up prices to record levels . It’s also hit renters hard. In 2022, a full 50% of renter households were “cost-burdened,” meaning they paid 30% or more of their income toward rent, and half of those cost-burdened renters paid at least 50% of their income toward rent according to an analysis by the Harvard Joint Center for Housing Studies.