Troubling News. The Lack of Homes in the US
From 2009 to today, new construction of single-family homes, condominiums, and apartment units totaled 5.6 million. Over the same period, approximately 1.7 million housing units were deemed uninhabitable or obsolete and were demolished and removed from the housing stock. These two figures result in a net addition of 3.9 million housing units to the country’s stock. Is that adequate in light of 17.3 million additional people residing in the country over the same period?Clearly, the correct answer is no. Considering the average household size of 2.5 persons, a total of 6.9 million new housing units would be required to accommodate the country’s rising population. The 3.9 million units that were actually created fall far short of the demand-by some 3 million homes.
That explains why rental vacancies are falling and housing inventories are shrinking. Not surprisingly, local market conditions vary. States with declining populations, including Connecticut, Illinois, and West Virginia, may have a less pressing need for additional home construction. But those places are exceptions. Housing shortages are the rule in the majority of states and there’s absolutely no reason to expect something to change this current year.
There are essentially two major consequences of a persistent housing shortage: a continuing steep rise in housing costs and people needing to double or triple up to afford a home. The younger generation may have to find multiple roommates or else live with their parents. That latter scenario is probably not what most young people dream about, but it’s what the American dream about owning a home could become if we don’t spur more housing development in the united states soon.
