U.S. Housing Market Faces 4 Million-Home Shortage--Realtor.com® Calls on Lawmakers to Let America Build

Rhea-AI Summary

Realtor.com reports that the U.S. faces a critical housing shortage of 3.8 million homes, marking the third-largest annual gap since 2012. Despite reaching a two-decade high of 1.6 million home completions in 2024, closing this gap would take an estimated 7.5 years nationwide.

Regional disparities are significant: the South could catch up in 3 years, the West in 6.5 years, the Midwest in 41 years, while the Northeast shows no progress. The shortage has led to approximately 1.63 million 'pent-up' households, primarily affecting Millennials and Gen Zers who opt to live with family or roommates.

In response, Realtor.com launched the 'Let America Build' campaign to advocate for policy changes addressing supply constraints. While 2024 saw new construction outpace household formations for the first time since 2016, with 1.36 million homes started, multi-family housing starts fell to their lowest level since 2017.

Positive

• Home completions reached 1.6 million in 2024, highest in nearly two decades
• New construction outpaced household formations for first time since 2016
• Single-family housing starts reached second-highest level since 2007
• South region reduced housing gap by 24.9% in 2024
• West region narrowed housing gap by 13.4%

Negative

• 3.8 million home supply shortfall persists nationwide
• Northeast region's housing gap widened by 1.2%
• Multi-family housing starts fell to lowest level since 2017
• Midwest showing minimal progress with only 2.4% gap reduction
• 1.63 million potential households unable to form due to housing constraints

Insights

Real Estate Analyst

Realtor.com's launch of the "Let America Build" campaign represents a strategic positioning move by News Corp (NWSA) to address the 3.8 million home shortage in the US housing market. This initiative shifts Realtor.com beyond merely providing listings toward becoming an influential policy advocate in the housing sector.

The comprehensive market analysis accompanying this announcement provides valuable insights: despite housing completions reaching 1.6 million in 2024 (highest in nearly two decades), the persistent supply gap remains the third-largest since 2012. The regional disparities are particularly telling - closing the gap would take just 3 years in the South versus 41 years in the Midwest, highlighting geographic opportunities for News Corp's real estate services.

Perhaps most significant is the identification of 1.63 million "pent-up" households that didn't materialize in 2024 due to affordability constraints. This represents substantial latent demand that could eventually flow through Realtor.com's platform if housing supply expands.

While this campaign positions NWSA as a thought leader addressing a critical economic issue, its immediate financial impact remains uncertain. Success would ultimately depend on influencing policy changes that typically move slowly. However, any meaningful increase in housing supply would likely drive transaction volume through Realtor.com's platform, potentially benefiting News Corp's digital real estate services segment over the long term.

Policy & Regulatory Specialist

The "Let America Build" campaign represents a calculated move by News Corp to influence housing policy at a critical juncture. By highlighting the 3.8 million home shortfall and advocating against "restrictive zoning" and "outdated regulations," Realtor.com is positioning itself to shape legislative conversations across local, state, and federal levels.

This initiative is particularly timely given the increasing political focus on housing affordability. By framing the issue as "holding back economic growth" and making homeownership "increasingly out of reach," Realtor.com is strategically aligning with broad bipartisan concerns while potentially influencing policy in ways that would expand its addressable market.

The campaign's showcase at SXSW, featuring prominent speakers including Austin's mayor, demonstrates NWSA's efforts to build coalitions with "builders, policymakers and housing advocates." This multi-stakeholder approach increases the campaign's potential policy impact beyond what Realtor.com could achieve alone.

From an investment perspective, this represents an intriguing long-term strategy. While most real estate platforms focus solely on transaction facilitation, NWSA is attempting to expand the overall market size through policy change. If successful in even partially addressing zoning restrictions, the initiative could generate substantial value by increasing housing starts and transactions - though such policy changes typically face significant local resistance and implementation delays, limiting near-term financial impact.

• The 3.8 million home shortfall is the third-largest since 2012
• At the current pace, closing the housing gap would take an estimated 7.5 years nationwide—3 years in the South, 6.5 years in the West, 41 years in the Midwest, and the Northeast making no progress
• Many Millennials/Gen Zers chose to live with others, leaving an estimated 1.63 million "pent-up" households unformed in 2024 that would have otherwise widened the gap

AUSTIN, Texas, March 10, 2025 /PRNewswire/ -- More than a decade of underbuilding has left the U.S. with a shortage of nearly 4 million homes, according to a new analysis from Realtor.com^®. With home prices and rents stretching budgets to their limits, this persistent supply gap is pushing homeownership increasingly out of reach for millions of Americans. To tackle one of the biggest barriers to affordability, Realtor.com^® is launching Let America Build, a national campaign advocating for solutions that expand housing supply.

While recent construction gains show progress, they highlight the urgent need for bold policy action. Realtor.com^®'s recent analysis found that in 2024, home completions grew to 1.6 million, the highest level in nearly two decades, driven by an increase in both single- and multi-family construction. For the first time since 2016, new construction activity outpaced household formations. Yet, the nation still faces a supply shortfall of 3.8 million homes—the third-largest annual gap since 2012, trailing only 2020 and 2023. At the 2024 pace, closing the gap would take 7.5 years, with the South catching up in three years, the West in 6.5 years, the Midwest in a staggering 41 years, and the Northeast making little to no progress.

Despite more homes being started last year, rising housing costs compounding on top of a lack of availability has kept many young adults from forming new households. Instead, many Millennials and Gen Zers opted to live with family or roommates, leading to an estimated 1.63 million "pent-up" households that didn't materialize in 2024. These households are an important part of understanding the challenge, and contribute to the almost 4 million total housing supply gap, highlighting the unmet demand for homes.

"While builders made strides last year, the scale of the historic housing shortage, paired with strong pent-up demand, meant that new supply couldn't fully close the nearly 4 million-home gap," said Danielle Hale, chief economist, Realtor.com^®. "Young households are particularly feeling the strain, as buying a home on an early- to mid-career salary is increasingly out of reach for many. Though a rise in both multi- and single-family construction offered some relief amid low existing inventory, addressing the gap will take sustained effort and smart policy."

Realtor.com^® Launches Let America Build
Realtor.com^®'s national Let America Build campaign is advocating for solutions that cut through red tape, restrictive zoning, and outdated regulations that are constricting the ability to build the homes America needs. The initiative calls on lawmakers at every level to make bold, pro-building choices. Realtor.com^® aims to join forces with some of the biggest industry leaders, including builders, policymakers and housing advocates to push for actionable change that will help create more homes—faster.

"America's housing shortage is holding back economic growth, driving up costs, and making it harder for millions of families to find a home," said Damian Eales, CEO of Realtor.com^®. "Through Let America Build, we're rallying the right voices to push for real solutions that will unlock supply and make homeownership more attainable. That's a win for families, communities, and the entire economy—because when housing works, everything works."

New Construction Overtakes Household Formations; Costs Sideline Young Households
As policymakers, industry leaders, and advocates discuss solutions to address the housing shortage, recent construction data shows some progress. For the first time since 2016, Realtor.com^®'s report found new home construction outpaced household formations in 2024. Fewer than 1 million new households were formed in 2024—the slowest annual pace since 2016. Meanwhile, 1.36 million homes were started, exceeding household formations by nearly 400,000. Despite overtaking household formations, total housing starts were at their lowest level since 2020, largely from a slowdown in multi-family construction, while single-family housing starts surged to their second-highest level since 2007, as builders ramped up production to address the shortage of existing homes on the market.

Multi-Family Construction Slows Amid Rising Rental Supply
While overall home completions grew last year, multi-family housing starts fell to their lowest level since 2017. After several years of strong multi-family activity, builders pulled back, particularly in high-density developments, responding to an oversupply in the rental market post-pandemic. This is likely foreshadowing a lower pace of new multi-family rental supply that will be completed in the near future. Still, the increase in both single- and multi-family completions helped drive overall inventory gains.

Regional Shifts: South Leads the Way
Housing supply trends varied widely by region. The South saw the most significant improvements in their housing gap in 2024, shrinking by 24.9%; however, it still has the largest gap by volume, with 1.15 million units needed. In the West, decent levels of new construction combined with only modest household formation contributed to the region's progress in narrowing its housing gap by 13.4%. The Midwest saw only modest progress, with a 2.4% reduction in its gap. In contrast, the Northeast was the only region where the gap widened, growing by 1.2% over the year, with 1.04 million units needed.

Realtor.com^® at SXSW: Sparking the Conversation on Housing Solutions
To further underscore the urgent need for more affordable homes, Realtor.com^® hosted three key panel discussions at South by Southwest – the popular Austin, Texas-based festival and conference known for fostering innovation across tech, policy, and culture. The sessions explored innovative solutions in homebuilding, Texas' approach to housing policy, and America's inventory and affordability crisis and featured prominent speakers, including Austin Mayor Kirk Watson; John Ho, CEO of Landsea Homes; Realtor.com^® Chief Economist Danielle Hale; and Sara Bronin, Founder & CEO of the National Zoning Atlas, among others. Watch the replays here.

Methodology
To view the complete 2025 Housing Supply Gap report and its methodology, visit https://www.realtor.com/research/us-housing-supply-gap-2025/.

About Realtor.com^®
Realtor.com^® pioneered online real estate and has been at the forefront for over 25 years, connecting buyers, sellers, and renters with trusted insights, professional guidance and powerful tools to help them find their perfect home. Recognized as the No. 1 site trusted by real estate professionals, Realtor.com^® is a valued partner, delivering consumer connections and a robust suite of marketing tools to support business growth. Realtor.com^® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc.

Media Contact: Sara Wiskerchen, press@realtor.com

 

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SOURCE Realtor.com

FAQ

How large is the current U.S. housing shortage according to Realtor.com's 2025 analysis?

The U.S. faces a shortage of 3.8 million homes, representing the third-largest annual gap since 2012.

How long would it take to close the housing supply gap at the current construction pace?

At the 2024 pace, it would take 7.5 years nationwide, varying by region: 3 years in the South, 6.5 years in the West, 41 years in the Midwest, and the Northeast showing no progress.

How many 'pent-up' households were estimated in 2024 due to housing constraints?

An estimated 1.63 million 'pent-up' households didn't materialize in 2024, as many Millennials and Gen Zers chose to live with family or roommates.

What was the level of new home construction in 2024 compared to household formations?

In 2024, 1.36 million homes were started, exceeding household formations by nearly 400,000 - the first time construction outpaced household formation since 2016.

Which U.S. region has the largest housing supply gap in 2024?

The South has the largest housing gap by volume, with 1.15 million units needed, despite showing the most significant improvement with a 24.9% reduction in 2024.