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, a new Zillow analysis shows.
Zillow said the 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 mainly of individuals and families living in another family’s owned or rented home.
Across the country in 2021, there were nearly 8 million missing households, compared to just 3.7 million housing units available for rent or sale, a deficit of 4.3 million homes, according to Zillow.
“The U.S. housing market is like a high-stakes version of the game musical chairs,” Orphe Divounguy, senior economist at Zillow, said in a release. “There are simply not enough homes for millions of people. Unless we address the shortage of smaller, more-affordable, starter-type homes, we risk leaving families without a seat — and it will only get worse over time.”
For each of the 3.7 million housing units available for rent or sale across the country in 2021, there were more than two potential households — families likely in need of their own homes. This means even if every missing household was willing and able to move into their own home, 4.3 million households would have been left without a place to move to.
The bulk of families doubling up have consistently lower incomes, highlighting the need for smaller, more affordable housing. Of the families that are doubling up, 68 percent had an annual income of $35,000 or less, Zillow stated.
Data also shows the mismatch between potential housing needs and available homes playing out not only in the most expensive coastal housing markets such as Los Angeles, San Francisco, San Jose, Calif., San Diego and Boston, but also in places like Boise, Idaho.