Report: U.S. Needs 7.3 Million More Homes
April 17, 2018
Housing construction has not kept pace with population growth in the U.S. for more than a decade, and in order to stymie shortages across the nation, builders will need to construct 7.3 million more homes, according to a new report. The Up for Growth National Coalition, a group of real estate developers, owners, and builders of affordable housing, finds that since 2000, builders in about 22 states and the District of Columbia have not constructed enough homes to sustain population growth.
California is the most in need of new housing, having built 3.4 million fewer homes than necessary to support its population during this time period, the report notes. Other states are also grappling with a shortage of buildable lots, labor, and materials. “As we dug into the numbers behind this, at a local market level, we’re seeing a pronounced affordability challenge in places like Arizona,” Mike Kingsella, executive director of the Up for Growth National Coalition, told The Wall Street Journal. While Arizona and Utah are facing housing shortages, the report credits the problem to strong buyer demand among retirees and other growing population groups rather than too few buildable lots.
Home construction per household is near the lowest level in 60 years, John Rappaport, an economist at the Federal Reserve Bank of Kansas City, told the Journal. But some economists are cautious about the report’s findings, noting that most people who have trouble finding a home will work out different living arrangements, such as doubling up with family members or roommates. They also might decide to move to areas where homes are more abundant, prompting a population shift, the Journal reports.
Source: “Homebuilding Isn’t Keeping Up With Growth, Development Group Says,” The Wall Street Journal (April 16, 2018) [Log-in required.]
Updated: August 17, 2018