U.S. short 4 million housing units, industry report finds

Despite a recent slowdown in home sales, brought on by the combination of prices and mortgage rates, the U.S. still faces a housing shortage. A new study by Realtor.com puts the shortfall at 4 million homes.

The stark figures, released in a press statement, highlight the growing chasm between housing demand and available inventory. The shortage was mostly caused by years of underbuilding following the 2009 housing market crash. It was compounded by recent economic factors that are driving up prices and creating fierce competition among prospective buyers.

The report concludes that the housing market is facing a significant crisis, causing families to struggle to find affordable housing. The report points to a confluence of factors contributing to the crisis, such as construction delays, supply chain disruptions, and rising material costs.

Another factor is causing a shortage. Current homeowners, especially those with low mortgage rates, are reluctant to sell. 

What can be done?

What’s the answer? Realtor.com is calling on policymakers to implement strategies that encourage new home construction and alleviate the existing supply constraints. These strategies include streamlining permitting processes, incentivizing builders, and addressing zoning regulations that hinder development.

"We need a comprehensive approach that tackles the root causes of the housing shortage," the real estate platform said in a statement. "By 'Letting America Build,' we can create more opportunities for homeownership and strengthen communities across the country."

An independent report suggests the struggle to find affordable housing is taking a toll on prospective buyers. The Fannie Mae Home Purchase Sentiment Index decreased 1.8 points in February to 71.6, driven largely by consumers' increased pessimism that mortgage rates will go down in the next year. 

The share of consumers who say it is a good time to buy a home is only 24%, while the share who say it is a good time to sell dipped to 62%. February also saw a notable decline in consumers' optimism toward their personal financial situation, including household income and concern they could lose their job.