The US housing shortage is 'awful' and will likely get worse with no apparent end in sight
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Loading... - Olivia Carrick
- 28 Oct 2022
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Awful according to recent data, experts say. And there's apparently no improvement for the foreseeable future thanks to continued demand for homes despite rising mortgage interest rates and high home prices.
"There doesn't appear to be any end in sight," Nadia Evangelou, a senior economist and director of forecasting for the National Association of Realtors told USA TODAY.
Depending on who you ask, experts believe there is a nationwide housing shortage of between 2 million to nearly 6 million newly built homes.
Evangelou said the association estimates there's a shortage of 5.5. million homes. The organization uses its housing shortage tracker to compare the supply and demand by the number of single-family housing permits issued for every two new jobs in 175 U.S. markets.
It's finding: Cities both big and small are dealing with severe underbuilding.
Where are the biggest housing shortages?
The more severe underbuilding is happening in major cities, according to experts.
For example, Los Angeles is among the most underproduced housing market in the U.S. with a shortfall of nearly 400,000 homes or about 8.4%, Mike Kingsella, CEO of Up for Growth, a Washington, D.C.-based housing policy research nonprofit, told USA TODAY. In July, Up for Growth released a study tracking more than 800 U.S. housing markets across the country from 2012 to 2019.
And similar to Up for Growth, the National Association of Realtors also cites LA as among the big cities with severe housing shortages. The LA metro area had 247,400 new jobs compared to 11,206 single-family permits, the Evangelou said.
Still, LA is not the more severely underbuilt.
That distinction belongs to the New York City-Newark and Jersey City, New Jersey metro area. There were nearly 497,000 new jobs compared to 13,229 single-family permits issued in that metro area during that period, Evangelou said.
Other areas that have high housing shortages include the San Francisco-Oakland-Hayward, California area, the Boston-Cambridge-Nashua, Massachusetts area, and the cities of Springfield and Rockford, Illinois.
Will the housing shortage spread?
Once confined to the coasts and the Southwest, the lack of enough housing production to meet demand now affects nearly every state and several major metro areas in America, Kingsella said.
"We're seeing housing underproduction in every corner of the U.S., said Kingsella, whose nonprofit estimates there's a 3.8 million housing shortfall. "And it's certainly not going to get any better as we see interest rates climb while trying to tamp down inflation. This also means we are perversely increasing housing costs." Read More…
