A new tool measuring the housing shortage by metro compares the number of permits issued relative to the number of new jobs.
Seven out of the top ten metros with the highest housing shortage are in California, found the National Association of Realtors' index. The highest value was 13.6 in April, in San Jose, Calif., which translates to 14 new jobs per single-family unit permitted. Research economist Nadia Evangelou concluded that the simple answer for these constrained markets is to build more homes. However, the growing aging population of Americans likely to stay in their homes, and other factors "will make a return to 'normal' housing inventory levels difficult to reach in the near-term."
Home prices around the country are continuing to surge—and they are not likely to slow down any time soon. In the last three years, the national median home price has increased about 20 percent, with annual gains of six percent on average. Lack of housing inventory is considered the main reason that drives up home prices. Although new home construction has picked up, it is still not enough to accommodate the increased housing demand. Furthermore, the unemployment rate has dropped ... As more people return to the workplace, housing demand is expected to increase.