US housing deficit grew to 4.7 million despite construction surge
Rhea-AI Summary
Zillow (NYSE:ZG) reports that America's housing shortage reached a record 4.7 million units in 2023, with the deficit growing by 159,000 homes despite robust construction activity. While 1.4 million new homes were added to the housing stock in 2023, this failed to match the formation of 1.8 million new families.
The analysis reveals that 8.1 million families are currently "doubled up," sharing homes with non-relatives, with Millennials representing 38% of these arrangements. The largest housing deficits are concentrated in major metros like New York (402,361 units), Los Angeles (338,750 units), and Boston (150,541 units).
Despite record construction levels of 1.45 million completed units in 2023 and 1.63 million in 2024, affordability remains a challenge. A median-income family now needs a $17,670 raise to afford a typical home compared to 2019 levels.
Positive
- None.
Negative
- Housing deficit reached all-time high of 4.7 million units
- 8.1 million families forced to share homes with non-relatives
- Median-income families need $17,670 more to afford a typical home compared to 2019
- Major metros facing severe shortages (New York: 402,361 units, Los Angeles: 338,750 units)
- Available homes for rent or sale decreased by 2.8% year-over-year
News Market Reaction
On the day this news was published, ZG gained 3.89%, reflecting a moderate positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
8.1 million families 'doubled up,' sharing their homes with people not related to them
- America's housing deficit grew by 159,000 homes in 2023, according to the latest Census data.
- Roughly 1.4 million new homes were added to the housing stock in 2023, but that number didn't keep pace with 1.8 million newly formed families.
- Millennials represent the largest generation of people sharing homes with non-relatives.
Construction boomed in response to high demand and price growth during the early years of the pandemic. But that hasn't been enough to keep up with the growing population, let alone undo nearly two decades of underbuilding that kicked off during the Great Recession.
"The unfortunate fact is that we still don't have enough housing in this country for people who need it. Construction has helped prevent the housing deficit from ballooning, but it hasn't yet begun to close the gap," said Orphe Divounguy, senior economist at Zillow. "We know what works: lower building restraints to allow for more density and less expensive housing. More of these measures at the local level can help get more homes built and begin to ease this outsize financial burden for millions of Americans."
In 2023, 3.4 million homes sat vacant and available for rent or for sale, according to Census data. Meanwhile, 8.1 million families shared their homes with people who weren't related to them. While some people choose to live with roommates, most of these families would probably prefer their own place if one were available that they could afford.
While mortgage costs are slightly lower than last year nationwide, buying a home is still a stretch, especially for first-time buyers. A family earning the median household income could afford to buy a typical home in 2019 — now they would need a
Construction boom slows deficit increase, but hasn't stopped it
A home-building surge over the past five years has helped slow the growth of the housing deficit, but isn't reversing it. The housing deficit grew by 159,000 homes in 2023 — still an increase, but smaller than the jump of 257,000 in 2022.
The total number of homes in America grew by 1.4 million homes in 2023, up from 1.3 million added the year before. This includes new construction and subtracts units that were destroyed. While the total number of families also increased, fewer new families had to share a home compared to 2022.
Fewer building restrictions and more density are needed
Builders completed 1.45 million units in 2023, and that momentum continued in 2024, with 1.63 million units completed; both are records since 2007. Builders responded faster to the pandemic-era spike in demand in areas with fewer building restrictions, Zillow Research found. This has helped price and rent growth ease in those metros and balanced those markets faster than in places with more stringent regulations.
Experts overwhelmingly agree that relaxing zoning laws to raise density is one of the best ways to make housing more affordable. These measures have broad support among homeowners and renters. Even adding a modest amount of density in the country's largest markets could create millions of new homes.
That's why Zillow advocates in support of state-level initiatives that relax zoning requirements for affordable housing and 'missing middle' higher-density housing, including ADUs, duplexes and triplexes.
Millennials share housing with nonrelatives more than any other generation, making up
Among the 50 largest major metros,
Metro Area* | Housing | Change in Housing | Change in | Raise Needed for Median- |
4,699,836 | 159,063 | -2.8 % | ||
402,361 | 12,437 | -3.2 % | ||
338,750 | 2,022 | 0.9 % | ||
106,522 | 9,143 | -9.4 % | - | |
49,204 | 1,054 | 1.9 % | ||
20,164 | 136 | 2.3 % | ||
132,238 | (983) | -3.1 % | ||
81,448 | 8,580 | -4.7 % | ||
71,966 | 5,022 | -4.5 % | ||
66,323 | 780 | 2.6 % | ||
150,541 | (4,571) | 2.6 % | ||
98,703 | 4,719 | 7.8 % | ||
139,990 | (11,501) | 8.2 % | ||
85,087 | 8,099 | -5.6 % | ||
36,187 | 1,198 | 3.4 % | - | |
101,923 | (5,974) | 8.3 % | ||
73,059 | (4,501) | 6.2 % | ||
95,831 | 1,892 | 0.7 % | ||
33,200 | 1,858 | -0.2 % | ||
70,919 | (749) | 1.8 % | ||
40,644 | 3,836 | -12.3 % | ||
17,368 | 2,544 | -7.7 % | - | |
24,402 | 2,874 | 2.2 % | ||
22,098 | 3,507 | -2.9 % | ||
13,558 | (2,220) | 7.5 % | ||
70,485 | (1,799) | -0.9 % | ||
60,431 | (2,293) | 4.9 % | ||
15,420 | (212) | 0.7 % | - | |
32,025 | (256) | -1.6 % | - | |
63,210 | 1,878 | -0.1 % | ||
32,192 | 3,117 | -6.8 % | ||
27,923 | 344 | -5.9 % | ||
36,219 | 1,240 | -2.5 % | ||
15,005 | 330 | -6.1 % | - | |
13,774 | (1,609) | -1.0 % | - | |
56,378 | (1,178) | 5.2 % | ||
34,843 | (1,142) | -4.1 % | ||
19,887 | 1,044 | -7.6 % | ||
29,791 | 3,318 | -13.9 % | ||
13,243 | (1,007) | 10.8 % | ||
13,929 | (977) | 1.8 % | ||
11,605 | (2,365) | -5.1 % | - | |
11,096 | (635) | 3.3 % | ||
1,543 | (1,807) | 1.8 % | ||
15,245 | (1,118) | 8.5 % | ||
11,107 | 1,144 | -1.8 % | - | |
4,234 | 30 | 1.3 % | ||
33,258 | 3,078 | 0.2 % | ||
13,131 | (426) | -5.1 % | ||
17,194 | 1,993 | -12.6 % | - | |
5,966 | 1,925 | -13.5 % | - |
*Table ordered by market size |
About Zillow Group
Zillow Group, Inc. (Nasdaq: Z and ZG) is reimagining real estate to make home a reality for more and more people. As the most visited real estate app and website in
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SOURCE Zillow
FAQ
What is the current housing deficit in the United States according to Zillow (ZG)?
How many families are sharing homes with non-relatives in 2023?
Which U.S. cities have the largest housing deficits in 2023?
How much additional income does a median-income family need to afford a typical home in 2023?
How many new homes were added to the U.S. housing stock in 2023?
What percentage of 'doubled up' households are Millennials vs. other generations?
