U.S. Home Shortage Estimated at Four Million

Austin, TX, March 17, 2025-More than a decade of underbuilding has left the U.S. with a shortage of nearly four million homes, according to a new analysis from Realtor.com. With home prices and rents stretching budgets to their limits, this persistent supply gap is pushing homeownership increasingly out of reach for millions of Americans. 

While recent construction gains show progress, they highlight the urgent need for bold policy action. Realtor.com's recent analysis found that in 2024, home completions grew to 1.6 million, the highest level in nearly two decades, driven by an increase in both single- and multi-family construction. For the first time since 2016, new construction activity outpaced household formations. Yet, the nation still faces a supply shortfall of 3.8 million homes-the third-largest annual gap since 2012, trailing only 2020 and 2023. At the 2024 pace, closing the gap would take 7.5 years, with the South catching up in three years, the West in 6.5 years, the Midwest in a staggering 41 years, and the Northeast making little to no progress.

Despite more homes being started last year, rising housing costs compounding on top of a lack of availability has kept many young adults from forming new households. Instead, many Millennials and Gen Zers opted to live with family or roommates, leading to an estimated 1.63 million "pent-up" households that didn't materialize in 2024. These households are an important part of understanding the challenge, and contribute to the almost four million total housing supply gap, highlighting the unmet demand for homes.

"While builders made strides last year, the scale of the historic housing shortage, paired with strong pent-up demand, meant that new supply couldn't fully close the nearly four million-home gap," said Danielle Hale, chief economist, Realtor.com. "Young households are particularly feeling the strain, as buying a home on an early- to mid-career salary is increasingly out of reach for many. Though a rise in both multi- and single-family construction offered some relief amid low existing inventory, addressing the gap will take sustained effort and smart policy."