How Many New Homes Would It Take To Fix the Housing Shortage?

February 3, 2020
Building Home
By makibestphoto

There is no quick fix to address the housing shortage. The only way to dig ourselves out is to continue to dig into lots to build the 3.8 million homes needed to fully meet potential buyer demand. It helps that builders are picking up the pace in both single-family and multifamily housing, but in order to close the gap, the industry must hit roughly 12.5 starts per 1,000 households for at least four or five years. Currently, we stand at 7.3 starts per 1,000 households. With this unbalance in supply and demand, the new decade could be one of great opportunity and prosperity. But the shadow of the Great Recession still looms over the market, holding some builders back from making bold moves. 

America’s housing shortage is definitely no secret. But just how bad is it? According to a new analysis from, the market needs a whopping 3.8 million additional new homes to fully meet consumer demand.

Since 2012, nearly 10 million new households were formed in the U.S. Only 5.92 million single-family homes were built in that same period, leaving what Javier Vivas,’s director of economic research, calls “a nearly insatiable appetite from potential buyers, especially in the lower end of the market.”

Meeting that demand? According to Vivas, that will require two things: First, Baby Boomers and Gen Xers will need to free up some of the existing housing supply. Even more important is that builders need to “make bolder moves and capitalize on a hungry waitlist of first-time homebuyers.”

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