A new analysis from Zillow shows that a significant shortage of affordable housing options is fueling America’s affordability crisis, particularly for those looking to move out on their own for the first time.
According to the study, nationwide in 2021, approximately 8 million households (individuals or families living with non-relatives and possibly preferring to live alone) were missing, compared to only 3.7 million housing units available for rent. or sell, a deficit of 4.3 million.
For the real estate company, this huge housing deficit underscores the need for policies and investments that can boost construction.
This lack of housing, especially affordable options, has left millions of households “missing.” These missing households consist primarily of individuals and families living in the home rented or owned by another family.
“The US housing market is like a high-risk version of the game of musical chairs,” said Orphe Divounguy, a senior economist at Zillow. “There simply isn’t enough housing for millions of people. Unless we address the shortage of smaller, more affordable entry-level housing, we risk leaving families without a seat, and it will only get worse over time.”
According to the study, for every one of the 3.7 million housing units available for rent or sale nationwide in 2021, there were more than two potential households: families who likely needed their own homes. This means that even if all the missing households wanted and were able to move into their own home, 4.3 million households would have been left without a place to move to.
Zillow notes that most families who move have consistently lower incomes, highlighting the need for smaller, more affordable homes. Of the families doubling, 68% had an annual income of $35,000 or less.
The mismatch between potential housing needs and available housing across the country is manifesting itself dramatically in the most expensive coastal real estate markets, such as Los Angeles, San Francisco, San Jose, San Diego, and Boston, but also in places like Boise.
Metro areas with the highest housing deficit, according to Zillow:
Country: United States
Housing unit deficit (2021): 4,283,926
Disappeared households (2021): 7,967,749
Metropolitan area: New York, NY
Housing unit deficit (2021): 376,376
Disappeared households (2021): 561,810
Metropolitan area: Los Angeles, California
Housing unit deficit (2021): 333,862
Disappeared households (2021): 446,105
Metropolitan area: San Francisco, California
Housing unit deficit (2021): 161,581
Disappeared households (2021): 204,028
Metropolitan area: Boston
Housing unit deficit (2021): 151,765
Disappeared households (2021): 184,200
Metropolitan Area: Washington, D.C.
Housing unit deficit (2021): 133,971
Disappeared households (2021): 192,375
For more details of the report, go here.
To view the full Zillow report, go here.
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