US Housing Deficit Grows to 4.5 Million Homes in 2022, Zillow Reports

New analysis from Zillow released on Tuesday shows that, despite a construction boom brought on by the pandemic, the US housing shortage grew to 4.5 million homes in 2022, up from 4.3 million in 2021. This deepening housing deficit is the root cause of the current US housing affordability crisis, Zillow says.

The housing market is driven by supply and demand, and when the number of people who want a home increases faster than the number of homes available, prices go up. This balance reached a tipping point when the Great Recession ushered in a decade of underbuilding while millennials—the biggest generation in US history—reached the prime age for first-time home buying. The result has been worsening affordability, now exacerbated by stubbornly high mortgage rates.

Across the country in 2022, there were roughly 8.09 million “missing households”—individuals or families living with nonrelatives—according to Zillow. Compare that to 3.55 million housing units that were available for rent or for sale, and there is a housing shortage of more than 4.5 million.

The pandemic-era housing frenzy sparked a construction boom, but thus far, that boom has fallen short. In 2022, 1.4 million homes were built—at the time, the best year for home construction since the early stages of the Great Recession. However, the number of families increased by 1.8 million that year, meaning the country did not even build enough to make a place for the new families, let alone begin chipping away at the deficit that has hampered housing affordability for more than a decade.

Commenting on the report, Orphe Divounguy, senior economist at Zillow, said:

“The simple fact is there are not enough homes in this country, and that’s pushing homeownership out of reach for too many families. The affordability crisis extends to renters as well, with nearly half of renter households being cost burdened. Filling the housing shortage is the long-term answer to making housing more affordable. We are in a big hole, and it is going to take more than the status quo to dig ourselves out of it.”