Why is the U.S. Housing Market Short By Nearly 4 Million Homes? | Global News Avenue

Home builders have created a small amount of dent in the number of homes needed to meet demand, but the U.S. housing market still lacks homes supplying millions.

According to Realtor.com, the U.S. housing market requires up to 3.8 million homes to meet the needs of homebuyers in 2024 Trend of limited housing inventory This puts pressure Family affordability.

This is the first year since 2016, home construction surpasses new home formations, which shows that builders are starting to catch up Ongoing housing shortages. But Realtor.com economists Hannah Jones and Danielle Hale estimate that it will take more than seven years for builders to build enough homes to bridge the gap between demand at prices in 2024.

“We are years away from normal, healthy housing conditions,” said Robert Frick, a corporate economist at Naval Federal Credit Union Corporation.

Zoning rules are the challenge of meeting needs for builders

Several factors lead to insufficient housing supply.

Frick said demand for homebuyers has fallen after the 2008 financial crisis sparked by a plunge in the housing market, allowing builders to build fewer homes. Now Housing demand is risingbuilders face new obstacles, including local Partition rules This can prevent the development of more affordable housing options.

A frequent policy goal is single-family zoning, which covers about 75% of residential land in the U.S., but can often ban the construction of multi-family units or other cheaper options.

Some economists oppose exclusive single-family zoning, believing that builders will build more affordable housing if allowed. Some suggestions include allowing the construction of properties in single-family partition areas or in zoning rules regarding single-family partition areas or the construction of attached residential units including replicas or smaller apartment buildings.

However, other researchers say that making these partitioning changes may not result in more affordable results. The Boston-based Pioneer Institute found that while some zoning changes in Massachusetts have led to more affordable housing options, the impact could impact long-term, based on broad affordability.

“Most of these policies have produced insignificant housing except for Boston and Cambridge,” said Andrew Mikula, a researcher at the Pioneer Institute. “It’s hard to find a scalable way to combine the math behind real estate development with the planned tasks of affordable housing.”