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U.S. Housing Market Short 7.2 Million Homes
[Mar 3, 2024]

U.S. housing markets continue to struggle with a growing shortage of new homes, the result of more than a decade of under-building relative to population growth, reports Realtor.com.

In 2023, the U.S. saw 1.67 million household formations, resulting in 17.2 million household formations between 2012 and 2023. In this time period, 14.7 million housing units were started, and 13.4 million were completed.

The total housing starts count includes 9.98 million single-family and 4.71 million multi-family homes. Housing completions include 9.5 million single-family homes and 3.9 million multi-family homes.

The gap between single-family home constructions and household formations grew to 7.2 million homes between 2012 and 2023. However, including multi-family home construction reduces this gap to 2.5 million homes.

Multi-family home construction fell as a share of all home starts in 2023 but remained above 2017-2021 levels.

The rate of overall housing starts slowed in 2023 while completions climbed.

In 2023, roughly 947,200 single-family homes were started, which is 5.8% fewer than in 2022, though still more than in any other single year back to 2010.

Multi-family home starts settled to 472,700 starts, down 13.6% compared to 2022, but still up 22.7% compared to the 2012-2022 average.

In 2023, 1.5 million housing units were completed (+4.5% year over year), including one million single-family units (-1.9% year over year and 450,100 multi-family units (+22.2% year over year). The overall number of home completions and the rate of multifamily home completion were both the highest since 2007 and 1987, respectively.

Household growth has outpaced single-family home permits in 73 of the top 100 US metros.

Household formations have outpaced overall (single- and multi-family) permitting activity most significantly in fast-growing sunbelt metros such as Deltona-Daytona Beach-Ormond Beach, Florida; San Antonio-New Braunfels, Texas; and Palm Bay-Melbourne-Titusville, Florida.

Source: Realtor.com