Housing affordability and availability are top of mind for buyers and homeowners all over the country. Housing prices nationwide have increased about 25% since the start of the pandemic in 2020, which is largely a result of housing demand exceeding the current supply.
According to Freddie Mac, there’s a U.S. housing shortage of 3.7 million units as of the third quarter of 2024. In other words, there are 3.7 million more individuals or families who need homes than there are homes available for them.
Housing shortage trends vary dramatically across the country based on factors like job growth, new home construction, local zoning regulations and more. Keep reading to learn which U.S. metro areas have the worst housing shortages right now and what that means for you.
TLDR: Key findings at a glance
- A housing shortage, also known as underproduction, is when there are fewer homes than there are people who need them.
- Riverside, California; Oxnard, California; and Yakima, Washington, are the three U.S. cities with the largest housing underproduction, as of 2022.
- Major metro areas — including Los Angeles; Washington, D.C.; and Miami — are currently experiencing housing shortages for a variety of reasons.
- If you’re buying a home in an area with a housing shortage, it’s important to prepare for a longer timeline, stiffer competition and higher sales prices.
- The exact cause of each metro area’s housing shortage varies — some are the result of fast job growth, while other areas have strict zoning laws that make building challenging.
What is meant by ‘housing shortage’
A housing shortage is a situation where there aren’t enough homes to meet the current needs of a community. In other words, there are more people seeking homes than there are homes available. Housing shortages result in limited options for renters and buyers, increased competition for the homes available and increasing home prices…