By Janine Barbera Dalli, Broker at Patriot Real Properties
Team@PatriotRealProperties.com - 516.527.2562
The housing market in the United States continues to grapple with a persistent supply shortage, with 2024 marking a critical moment in this ongoing crisis. Despite an increase in new-home construction outpacing household formations for the first time since 2016, the housing gap remains at 3.8 million homes—a staggering deficit affecting affordability, accessibility, and long-term economic stability.
At Patriot Real Properties, we recognize the importance of addressing this issue head-on. We are committed to identifying community needs and working toward real solutions that help our neighborhoods not just survive, but thrive. Whether you’re looking to buy, sell, or develop, reach out to Janine Barbera Dalli at Patriot Real Properties to explore opportunities to navigate this market.
Key Takeaways: The Housing Market at a Glance
• Despite progress, the U.S. still faces a 3.8-million-unit housing shortage.
• Housing completions in 2024 reached the highest level in two decades, particularly in single-family and multifamily housing.
• Young buyers are struggling. Nearly 1.6 million expected Gen Z and millennial households did not form due to rising housing costs.
• Regional disparities persist. The South has the largest numerical housing gap (1.15 million homes), but the Northeast remains the hardest-hit region.
• Closing the gap will take years. At the current rate of construction, it would take 7.5 years to close the housing supply gap nationwide—41 years in the Midwest and indefinitely in the Northeast.
This imbalance between supply and demand has driven home prices higher, forced many to remain in rental markets longer, and contributed to declining homeownership rates among younger generations.
The Housing Gap: What’s Driving It?
For over a decade, housing supply has not kept up with demand, leading to a historic shortage of available homes.
1. New Construction vs. Household Formation
While 1.36 million homes were started in 2024, only 1 million households formed, marking the slowest rate of household formation since 2016. This might sound like progress—but with a decade-long backlog of demand, the gap remains far from closed.
Why the slowdown?
• High mortgage rates have locked homeowners into existing properties.
• Affordability issues have delayed homebuying for younger generations.
• Rising material costs and zoning restrictions have made new construction expensive and difficult.
2. Rental Market Pressures
The rental market has also felt the squeeze. While multifamily inventory has increased, rents remain high, keeping many in rental housing longer than anticipated.
• Vacancy rates remain near historic lows, indicating sustained demand.
• More Gen Z and millennial households are “missing” from the market, either delaying homeownership or remaining in shared living arrangements due to cost.
3. Regional Differences in Housing Gaps
Not all regions are feeling the shortage equally:
Region | Housing Starts (2024) | Household Formations | Pent-Up Demand | Years to Close Gap |
South | 751K | 552K | 660K | 3 years |
West | 303K | 283K | 268K | 6.5 years |
Midwest | 185K | 191K | 195K | 41 years |
Northeast | 125K | -28K | 580K | Growing (No improvement) |
The Northeast: A Case Study in Housing Shortages
The Northeast has the largest housing deficit per capita, with the supply gap growing rather than shrinking.
What’s making the problem worse?
• Tight zoning laws preventing new developments.
• Soaring costs of land and construction.
• Slow approval processes for new projects.
Meanwhile, the South leads the way in closing the gap—projected to solve its shortage in just three years due to lower costs, higher construction rates, and more available land.
New Solutions: How Do We Close the Gap Faster?
Addressing this crisis requires innovative approaches to homebuilding, financing, and regulation. Here’s what can help:
1. Smart Zoning & Policy Reform
• Loosening single-family zoning laws to allow for duplexes, ADUs, and mixed-use developments.
• Incentivizing private developers to build affordable housing through tax credits and reduced permitting fees.
• Fast-tracking approvals for new residential projects in high-demand areas.
2. Increasing Affordable Housing Options
• Encouraging new builders to focus on smaller, more affordable homes.
• Expanding modular and prefabricated construction to lower costs and speed up production.
• Providing financial incentives (low-interest loans, down payment assistance) for first-time homebuyers.
3. Strengthening the Rental Market
• Encouraging affordable multifamily developments in urban centers.
• Offering more rent-to-own programs to bridge the gap between renting and homeownership.
• Creating public-private partnerships to invest in workforce housing.
What’s Next? Work with a Trusted Broker to Find Solutions
While the national housing shortage presents a significant challenge, solutions exist—and we’re here to help. At Patriot Real Properties, we take a community-first approach, working with buyers, sellers, and developers to find housing solutions that make sense.
• Looking to buy or sell? We’ll help you navigate this competitive market.
• Need guidance on investment opportunities? We identify high-growth areas with smart housing solutions.
• Interested in new construction? We work with builders and policymakers to make real estate development possible.
For personalized housing solutions, contact:
Janine Barbera Dalli, Broker
Team@PatriotRealProperties.com | 516.527.2562
By working together, we can bridge the housing gap, provide stable housing solutions, and build stronger communities.
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