Growing Inventory Isn't Improving Affordability in These Metros

Some parts of the U.S. have seen a strong uptick in new-home construction over the last few years, but in some metros, this growth in inventory hasn't necessarily equated to improved affordability. Instead, new supply is largely made up of oversized homes and luxury apartments aimed at higher-income households, according to a recent report from the Georgetown University Center on Poverty and Inequality.

The report shows that six metros—Houston, Dallas, Phoenix, Atlanta, Seattle, and Washington, D.C.—are outpacing the national average in housing production. Nationally, the share of new housing increased by 11.35% of housing was added between 2010 and 2023, but in these six metro areas, the share of new construction ranges from roughly 12.7% to as high as 22.4%.

Still, the majority of new units in these markets cater to moderate- and high-income earners.

New homes in these metros are larger than they have been in the past 

Newly-built homes in these six markets tend to be larger than older properties currently on the market. About one-third of homes constructed in the 1980s have four or more bedrooms. By comparison, nearly 59% of homes built since 2010 fall into that category, and less than 4% of newly constructed homes are duplexes, triplexes, or other higher-density housing types.

These housing types are more likely to attract high-earning households

When it comes to new housing in these metros, a majority are occupied by moderate-, middle-, and high-income households. In fact, 55% of residents in the newest housing across these six metro areas fall into these income categories. In housing built before 1971, high-income earners account for just 37%, with the majority being low or very low income.