The U.S. housing shortage grew to 4.5 million homes in 2022, up from 4.3 million in 2021, according to a report from Zillow.
The report shows that the inventory problem began during the pandemic – when detached homeowners were generally trying to stay isolated in their homes and many renters/multifamily owners were purchasing whatever detached homes were available. Mortgage rates were low and homes were generally more affordable, so inventory plummeted. The resulting shortage caused home prices to spike. Then, in 2023, mortgage rates surged, eroding affordability and stagnating the market.
“The simple fact is there are not enough homes in this country, and that’s pushing homeownership out of reach for too many families,” says Orphe Divounguy, senior economist at Zillow, in a statement. “The affordability crisis extends to renters as well, with nearly half of renter households being cost burdened. 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.”
Across the country in 2022, there were roughly 8.09 million “missing households” — individuals or families living with non-relatives. Compare that to 3.55 million housing units that were available for rent or for sale, and there is a housing shortage of more than 4.5 million.
The pandemic-era housing frenzy sparked a construction boom, but thus far, that boom has fallen short, Zillow says.
In 2022, 1.4 million homes were built — at the time, the best year for home construction since the early stages of the Great Recession.However, the number of U.S. families increased by 1.8 million that year, meaning the country did not even build enough to make a place for the new families, let alone begin chipping away at the deficit that has hampered housing affordability for more than a decade.
Photo: Karsten Winegeart