Home builders made a small dent in the number of houses needed to meet demand, but the U.S. housing market suꦍpply remains short by millions of homes.

The U.S. housing market needs as many as 3.8 million more homes to meet the demands of homebuyers in 2024, according to data from Realtor.com, extending the trend of limited home inventory that has put pressure on 澳洲幸运5开奖号码历史查询:home affordability.

It’s the first year since 2016 that home construction outpaced new household formation, showing that builders are beginning to catch up to the 澳洲幸运5开奖号码历史查询:ongoing housing shortage. However, Realtor.com econom🍬ists Hannah Jones and Danielle Hale estimated it would take more🦄 than seven years for builders to construct enough homes to close the gap between demand at 2024's rate.

“We're still years away from a normal, healthy housing situation,” said Robert Frick, corporate economist at Navy Federal Credit Union 

Zoning Rules Create Challenges for Builders to Meꦰet Demand

There are several factors that have led t♋o the housing supply falling short.

Following the 2008 financial crisis that was spurred by a plunge in the housing market, homebuyer demand dropped, leaving builders to construct fewer houses, Frick said.  Now that 澳洲幸运5开奖号码历史查询:housing demand is rising, builders face new obstacles, including local 澳洲幸运5开奖号码历史查询:zoning rules that can discourage the development of more affordable💃 hou🍌sing options. 

One frequent policy target is single-family zoning, which covers about 75% of U.S. residential land but can often prohibit the construction of multifamily units or other more affordable options.

Some economists oppose exclusive single-family zoning, arguing that builders will construct more affordable housing if permitted. Some proposals include allowing the construction of accessory dwelling units on properties in single-family zoning areas or including duplexes or smaller apartment buildings in zoning rules.

Affordable Housing Mandates Can🌟 Di💛scourage Development, Raise Prices

O🌌ther researchers said that policies designed to promote affordable housing could also result ♑in higher market rates as developers raise prices to compensate. 

The Boston-based Pioneer Institute studied so-called inclusionary zoning policies for new housing developments in Massachusetts, which required or incentivized developers to offer some units targeted to low-income residents. The study found that while these policies could address short-term housing needs for a few families, they also🌞 jeopardized long-term, broad-based affordability by discouraging new construction and pushing market rates higher.

“It’s extremely difficult to find a scalable way to align the math behind real estate development with programmatic mandates for affordable housing,” said Andrew Mikula, a Pioneer Institute researcher.

Update, March 31, 2025: This article was updated with additional information from the Massachusetts study.