The inventory shortage has been a prominent issue in housing for years, but how much work do builders have ahead of them in order to keep up with sky-high demand? A new Zillow report shows builders still have to fill a 1.35 million new-home construction shortfall caused by a decade of underbuilding.
Key findings:
- Zillow estimates that, since 2008, there has been a shortfall of 1.35 million homes in just the 35 largest U.S. metros, with growth stunted due to slowing population growth.
- More homes are needed as the population grows and household sizes decrease. There are about 2.5 people per household now, compared to three people per household as recently as the mid-1970s, said Zillow.
- Dallas has had the biggest post-recession decrease of single-family building permits, falling 167,093 homes behind the pre-2000 average. Miami (142,650), Phoenix (122,288) and Seattle (113,292) have also fallen behind by more than 100,000 homes.
The takeaway:
“Builders in recent months have put the pedal to the metal to get new homes up and meet a rush of demand, and we just saw the first full year of above-average construction since the mid-2000s housing crash,” said Zillow Senior Economist Jeff Tucker in a statement. “This isn’t a new boom cycle of new construction so much as it’s an attempt to get even from the last bust. There is still a long way to go to catch up from more than a decade of slow construction, and some markets have longer to go than others.”
