By Diana Olick | CNBC
According to new research from Realtor.com, the U.S. is short 5.24 million homes, an increase of 1.4 million from the 2019 gap of 3.84 million. CNBC reporter Diana Olick says from January 2012 to June 2021, 12.3 million American households were formed, but just 7 million new single-family homes were built. Although new household formation is slower than it was before the pandemic, builders would have to double their recent home production pace to close the gap in five to six years.
“The pandemic has certainly exacerbated the U.S. housing shortage, but data shows household formations outpaced new construction long before COVID. Put simply, new construction supply hasn’t been meeting demand over the last five years,” said Realtor.com chief economist Danielle Hale. “Millennials, many of whom are now in their 30s and even 40s, have debunked the industry’s ‘renter generation’ expectations.”
Household formation is when an individual moves out of a shared living situation.
Single-family home construction has been rising steadily since it bottomed in 2009 during the Great Recession. It is still not as high as it was just before the housing boom and is actually running at the slowest pace since 1995, according to the U.S. Census. The slower pace comes as the largest generation enters its typical home buying years.