- Economy
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- Housing shortage
There are 5 million new housing units since 2020, mostly in the South and West.
Read moreStateline coverageof how communities across the country are trying to create more affordable housing.
The United States has added almost 5 million housing units since 2020,most heavily in the South and most of them single-family homes,making a housing shortage look conquerable in muchof the nation.
Still, even more homes need to be built — especially single-family homes, experts say — and continuing high interest rates are hurting potential homebuyers.
Almost half of the housing increase from April 2020 to July 2023 came in six states: Texas, Florida, California, North Carolina, Georgia and Tennessee, according to a Stateline analysis of U.S. Census Bureau estimates to be released Thursday. That mirrors America’s post-pandemic moving patterns to plentiful suburban housing in Texas and Florida, but also California’s persistent push for more apartments in resistant areas across the state.
Housing experts caution that the supply has still not caught up with demand even after another good year for home construction in 2023. Last year produced the most housing units since 2007. “One Good Year Does Not Solve America’s Housing Shortage” was the title of a Moody’s Analytics report in January, which found single-family homes in particular remain in short supply.
Moody’s estimated a shortfall of about 1.2 million single-family homes and 800,000 other units, noting that home sales had slowed since reaching all-time-high prices in 2022 as interest rates climbed and made purchases even more unaffordable.
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The National Association of Realtors, in a February report, offered a higher housing shortage estimate of about 2.5 million units, mostly single-family homes.
Most of the new housing units in recent years have been single-family homes, according to a separate U.S. Census Bureau construction survey through the end of 2023. Production of new single-family homes reached more than 1 million annually in 2022 and 2023 for the first time since the housing bubble burst in 2007, according to the survey.
Apartment construction is also at historic levels, with 438,500 units built last year, the highest level since 1987. The number of apartments under construction at the end of the year, about 981,000, was an all-time high since the survey began in 1969.
New housing should continue to arrive at a strong pace for several years because so much constructionhas already started, saidDaniel McCue, a senior research associate at Harvard University’s Joint Center for Housing Studies.
“New construction can really only slow overheated rental rates, but it’s really hard-pressed to bring down rents or make things more affordable for people at the bottom,” McCue said. “Our focus is not on the overall shortage of housing units, but on the specific shortage of affordable and available homes for low- and moderate-income people.”
The housing unit data released Thursday, which tracks changes through the middle of 2023, shows continued increases across the country, with about 1.6 million new units annually for the past two years.
Increases were concentrated in the West and South, with half the 4.8 million new units since 2020 in a handful of states: Texas (about 806,000), Florida (586,500), California (371,000), North Carolina (270,500), Georgia (200,000) and Tennessee (164,000).
Percentage increases were highest in fast-growing Western states: Utah (up 9% since 2020), Idaho (up 8%) and Texas (up 7%). Five states had 6% growth in housing units: South Carolina, South Dakota, Florida, Colorado and North Carolina.
Arizona, Georgia and Nevada — all of which are key swing states in this year’s presidential election — were not far behind, with 5% growth in housing units.
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The housing shortage has become a major political talking point, even as states scramble to get more units built and people housed.
Even with Utah’s nation-leading growth in housing units for the decade, for example, Republican Gov. Spencer Cox called high housing prices “the single largest threat to our future prosperity” in his State of the State address this year.
“Housing attainability is a crisis in Utah and every state in this country,” Cox said, announcing a plan to build 35,000 small “starter” single-family homes in the next five years.
The Federal National Mortgage Association, known as Fannie Mae, reported last year that the typical homebuyer paid 35% of their income in mortgage payments in October, the highest since at least 2000.
A Utah-based think tank, the Kem C. Gardner Policy Institute at the University of Utah, in a report last year said the pandemic years brought a boom-and bust-cycle to the state’s housing construction. New permits increased 26% in 2021, only to drop 21% the next year as interest rates climbed. The new U.S. Census Bureau figures show new units in the state peaking at 38,500 in 2022 and falling back to about 30,000 in 2023.
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All states saw some housing growth, according to the Stateline analysis and census data, but it was slowest in some states affected by poverty or low population growth. There was only a 1% increase in housing units since 2020 in Rhode Island, Illinois, West Virginia, Connecticut, Alaska and New Jersey.
Alaska Republican Gov. Mike Dunleavy also mentioned housing affordability as one of the biggest challenges facing the state this year in his State of the State address. Dunleavy proposed a state-funded down payment assistance program for first-time homebuyers, and lumber grading changes designed to make homebuilding materials more affordable.
New Jersey Democratic Gov. Phil Murphy mentioned in his State of the State address the state’s low housing stock at a time when tens of thousands of New Yorkers are seeking suburban housing there.
“If our population grows while our housing stock remains steady, homeownership will be a luxury reserved only for those at the top. That is untenable,” Murphy said.
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