The U.S. housing market continues to grapple with a significant supply gap, stemming from a persistent shortfall in new residential units relative to the demand driven by new household formations and lingering pent-up demand. While there was a modest improvement reported in the previous year, the nation remains approximately 3.8 million units short of fulfilling housing needs. Current construction rates indicate that, at this pace, it would take more than seven years to adequately address this deficit, which has been a catalyst for the ongoing housing affordability crisis. Notably, the balance between new home construction and household formations remains precarious; despite roughly 1.4 million units initiated, household formations are at a nine-year low.

Key elements from the report include:
– **Supply Gap**: The ongoing deficit remains at 3.8 million housing units.
– **Construction Rates**: At current levels, it would take 7.5 years to resolve the shortage.
– **New Households**: The report noted a historically low formation rate for new households, particularly among Gen Z and millennials.
– **Regional Disparities**: The South is projected to close its supply gap in three years, whereas the Midwest and Northeast are on track to experience much longer resolution times.
– **Historical Context**: Total demand has exceeded new home construction annually since 2013, highlighting a long-standing issue that significantly affects housing affordability.

You can read this full article at: https://papersourceonline.com/economists-it-will-take-7-years-to-fix-the-housing-shortage-at-current-construction-pace/(subscription required)

Private Investors Capital is a professional private mortgage note buying firm with decades of experience. Contact us today for more information.