Building to Ramp Up

February 4, 2020
The current affordable housing shortage has been caused by supply-side headwinds for builders.

Home building in the 2010s was a story of the Long Recovery. After the Great Recession, the number of home builders declined significantly, and housing production was unable to meet buyer demand. This deficit of housing in the United States continues to exist because of persistent supply-side headwinds for builders, creating a critical housing affordability challenge for renters and homebuyers. Yet despite these challenges, residential construction is set to evolve and expand throughout the decade ahead.

Between 2010 and the end of 2019, there were 6.8 million single-family housing starts. That total included: 1.53 million custom home building starts, 827,000 townhouses starts (single-family attached) and 300,000 single-family built-for-rent (SFBFR) starts. The last ten years have seen significant amounts of underbuilding compared to prior decades. In the previous five decades, single-family housing starts averaged between 9.3 million and 12.3 million starts. The reduced amount of single-family home construction over the last decade is even more striking when considering the U.S. population has continued to increase over time.

Source: National Association of Home Builders