There is a sizable shortage of new homes across the U.S. The gap between single-family home constructions and household formations widened to 6.5 million homes between 2012 and 2022.
With multi-family home construction factored in, the gap is still 2.3 million homes.
That’s according to a new report from Realtor.com. The gap resulted from a decade of under-building relative to population growth.
In 2022, the U.S. saw 2.06 million household formations, resulting in 15.6 million household formations between 2012 and 2022. In this time period, 13.3 million housing units were started and 11.9 million were completed.
The total housing starts count includes 9.03 million single-family and 4.2 million multi-family homes. Housing completions include 8.5 million single-family homes and 3.4 million multi-family homes.
In the second half of 2021, single-family homes were being both started and completed at the fastest pace in the last decade, according to the report. But that changed when mortgage rates went haywire and demand halted, resulting in builders pulling back from new starts.
Multi-family home construction picked up in 2022, reaching 35.1% of all housing starts by the end of the year, a level not seen since 2015. They were up 47.8% compared to the 2012-2021 average.
The rate of overall housing starts slowed in 2022 while completions climbed—1.4 million housing units were completed, including 1.02 million single-family units and 370,700 multi-family units. The overall number of home completions and the rate of single-family home completion were both the highest in the last 10 years, according to the report.
Realtor.com says that an increase in both single and multi-family supply would help return balance to the housing market by taking pressure off of both sale and rent prices.