Zillow Explores the US Housing Affordability Crisis and the Millions of “Missing” Households

Zillow reported in a new market analysis released on Thursday (6-22-23) that a substantial shortage of affordable housing options is fueling an affordability crisis in the US. Zillow notes that in particular those looking to move out on their own for the first time are being significantly impacted. The report suggests that the huge housing deficit highlights the need for policies and investments that can boost construction.

According to Zillow data, the lack of housing—especially affordable housing options—has left millions of households “missing.” These missing households consist mainly of individuals and families living in another family’s owned or rented home. Across the US in 2021 (the latest US Census data), there were nearly 8 million missing households, compared to just 3.7 million housing units available for rent or for sale—a shortfall of 4.3 million homes.

Furthermore, for each of the 3.7 million housing units available for rent or sale across the US in 2021, Zillow estimates there were more than two potential households—families likely in need of their own homes. This means if every missing household were willing and able to move into their own home, 4.3 million households would have been left without a place to move to.

Adding additional background and his analysis to the report, Zillow Senior Economist Dr. Orphe Divounguy said:

“The US housing market is like a high-stakes version of the game musical chairs. There are simply not enough homes for millions of people. Unless we address the shortage of smaller, more-affordable, starter-type homes, we risk leaving families without a seat—and it will only get worse over time.”