Experts believe there is a nationwide housing shortage of between 2 million to nearly 6 million newly built homes. Evangelou said the association estimates there's a shortage of 5.5. million homes. The organization uses its housing shortage tracker to compare the supply and demand by the number of single-family housing permits issued for every two new jobs in 175 U.S. markets.
Los Angeles is among the most underproduced housing market in the U.S. with a shortfall of nearly 400,000 homes or about 8.4%, Mike Kingsella, CEO of Up for Growth, a Washington, D.C.-based housing policy research nonprofit, told USA TODAY. In July, Up for Growth released a study tracking more than 800 U.S. housing markets across the country from 2012 to 2019.
And similar to Up for Growth, the National Association of Realtors also cites LA as among the big cities with severe housing shortages. The LA metro area had 247,400 new jobs compared to 11,206 single-family permits, Evangelou said. Still, LA is not the more severely underbuilt. That distinction belongs to the New York City-Newark and Jersey City, New Jersey metro area. There were nearly 497,000 new jobs compared to 13,229 single-family permits issued in that metro area during that period, Evangelou said.
Other areas that have high housing shortages include the San Francisco-Oakland-Hayward, California area, the Boston-Cambridge-Nashua, Massachusetts area, and the cities of Springfield and Rockford, Illinois.
Despite a slightly rising inventory due primarily to price-weary prospective buyers, supply is expected to remain short for some time to come, said Robert Dietz, chief economist for the National Association of Home Builders.
Housing market first-timer- From contingency to foreclosure to housing market predictions, what you should know. Last month, Federal Reserve Chair Jerome Powell said the housing market might need "a correction" to make homes more affordable. Dietz predicts the Federal Reserve will ease up on interest rates no later than 2024 which will lead to a rebound in the housing industry. "The market for 2023 will be weak until then," Dietz said. "Home prices will remain high and supply will be low."
