Five Facts on the US Housing Shortage
Across America, more and more families are being squeezed by higher housing costs. Home prices have risen by an average of 30% over the past few years and home sales are at their lowest levels in more than a decade. While higher mortgage rates have cooled the housing market, a major challenge is the serious shortfall of housing supply in America.
Here are Five Facts about the housing shortage in America.
1. One in five Americans who don’t own a home say home ownership is out of reach.
Owning a home, often seen as a bedrock of the American Dream, is increasingly perceived as an unachievable aim for millions of Americans. A recent survey by Divvy Homes of 2,000 non-homeowning Americans revealed that only 53% believed they could own a home, while a disheartening one-third felt hopeless about ever owning one.
2. The US is short an estimated 3.8 million newly constructed housing units.
America isn’t building enough new homes. According to Up for Growth, a nonprofit advocating for affordable housing, that shortage of 3.8 million is nearly double the shortage of 1.65 million from 2012. In total, 47 states plus Washington, D.C., are experiencing this scarcity, leaving millions without access to affordable housing options.
3. An estimated 582,000 Americans experienced homelessness in 2022.
According to statistics from the Department of Housing and Urban Development, 18 out of every 1,000 Americans were unhoused for at least part of last year. Many are driven to homelessness by the disproportionate cost of rent, with many more households on the brink. The Cold And Uncared For Society notes that housing is considered unaffordable if it costs more than 30% of an individual's income, yet more than 18 million households in the United States pay more than 50% of their income for housing.
4. Home ownership is associated with higher levels of household wealth, civic engagement, and educational achievement, among other benefits.
Research by Habitat for Humanity highlights that US homeowners have an average net worth 400% higher than similar renters. They are more likely to be active in local communities, and their children have greater chances of graduating high school and attaining post-secondary education.
5. Construction of multifamily housing units in America has declined by one-third since 1987.
Multifamily housing units like condo buildings often offer increased opportunities for affordable home ownership for households. But after a boom in multifamily construction during the mid-20th century, construction dropped dramatically during the 1990s into the 2000s. To date, America hasn’t constructed more than 500,000 multifamily units in a single year since 1987. While more multifamily units are starting to be constructed, few potential new homeowners will see a benefit -- in 2021, the share of these units built for sale (condos), rather than for renting (apartments), was less than 5.4 percent, one of the lowest rates in the last 50 years.
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