Report: U.S. Housing Market Short Nearly 4M New Homes
Homebuyers in the market for a new home in 2020 are facing extremely low inventory, according to a recent analysis by realtor.com. According to the company, the 5.9 million single family homes built between 2012 and 2019 are not enough to offset the nearly 10 million new households formed in that time.
Single family home starts per 1,000 households grew from 4.6 in 2012 to 7.3 in 2019. While that growth was needed, levels remain well below the two-decade average, according to realtor.com. The company’s economists reported that even with above average pace of construction, it would take homebuilders four to five years to get back on track.
“New home starts are not keeping pace with demand,” said Javier Vivas, director of economic research at realtor.com. “Homebuilders have a mountain of opportunity, but a big hill to climb. The current inventory crisis and the need for 3.8 million new homes means a nearly insatiable appetite from potential buyers, especially in the lower end of the market.”
But the outlook isn’t all negative. Realtor.com reports that heading into the new decade, growing demographics and strong economic fundamentals should continue to underpin home builder confidence. Well qualified buyers with strong incomes are waiting the chance to buy, assuming the economy avoids a full recession and rates remain low for the foreseeable future.
David Cohen is Southeast Editorial Director at Connect Commercial Real Estate. David is a media veteran with more than 10 years of experience in journalism, copywriting and communications across a variety of roles. He is responsible for covering commercial real estate news and trends in the Southeast, Florida, Washington D.C. and Boston at Connect CRE as well as specializing in the Student Housing sector.
Prior to joining Connect, David was the editor of Northeast Real Estate Business magazine and Student Housing Business magazine at France Media as well as spending time freelancing for ESPN and the Associated Press in the fast-paced field of live sports event production. He is also an owner and investor in multifamily real estate in Atlanta, GA.
David currently resides in Atlanta and graduated from the College of Communication & Information at the University of Tennessee Knoxville.