Record Growth in Home Completions

The U.S. housing sector experienced significant growth in 2024, with home completions reaching 1.6 million. This marks the highest level of completions in nearly 20 years, attributable to a rise in both single-family and multifamily housing projects. Notably, new construction outpaced household formations for the first time since 2016, indicating a potential shift towards balancing supply and demand.

A Persistent Housing Supply Shortfall

Despite the surge in new home completions, the nation is still grappling with a substantial housing deficit of approximately 3.8 million units. This shortfall represents the third-largest gap recorded since 2012, trailing only the shortages noted in 2020 and 2023. Current projections estimate that at the 2024 construction pace, it would take nearly 7.5 years to bridge this gap, depending on regional variances:

• South: 3 years
• West: 6.5 years
• Midwest: 41 years
• Northeast: Little to no progress

In 2024, the South showed the most promising improvement, reducing its gap by 24.9%, while the West saw a 13.4% decline. Conversely, the Northeast faced an increased shortfall of 1.2%, resulting in a need for 1.04 million more units.

Impact on Young Households

The ongoing housing crisis disproportionately affects younger populations, particularly first-time home buyers. Rising housing prices are forcing many millennials and Gen Z individuals to remain in shared living situations, further amplifying the estimated 1.63 million “pent-up” household formations that did not emerge in 2024. Homeownership rates for individuals under the age of 35 have notably declined, highlighting an urgent need for affordable housing solutions.

Construction Trends and Challenges

While the number of housing starts reached 1.36 million in 2024, this figure is still the lowest since 2020. A key factor contributing to this trend is the slowdown in multifamily construction, which hit its lowest levels since 2017. Currently, multifamily buildings account for only about 25% of new constructions, down from earlier years where a higher percentage was observed.

The constraints in supply have left many residents struggling with affordability, driving down homeownership rates among younger age groups significantly.

Call for Policy Reforms

In response to the critical need for increased housing supply, Realtor.com has launched the “Let America Build” campaign. This initiative aims to advocate for legislative reforms that streamline processes and eliminate restrictive zoning laws hindered by outdated regulations. The campaign underscores the fact that tackling America’s housing shortage is essential to fostering economic growth and affordability.

“America’s housing shortage is holding back economic growth, driving up costs, and making it harder for millions of families to find a home,” stated Damian Eales, CEO of Realtor.com. “Through Let America Build, we’re rallying the right voices to push for real solutions that will unlock supply and make homeownership more attainable. That’s a win for families, communities, and the entire economy — because when housing works, everything works.”