There is a 52% rise in the nation’s home shortage compared with 2018.

According to WSJ coverage, the U.S. housing market is 3.8 million single-family homes short of what is needed to meet the country’s demand, according to a new analysis by Freddie Mac. The estimate represents a 52% rise in the nation’s home shortage compared with 2018, the first time Freddie Mac quantified the shortfall. The figures underscore the severity of the housing deficit, which is a major factor fueling the current red-hot housing market. The shortage is especially acute for entry-level homes, which makes it more expensive for first-time homebuyers to enter the market, said Sam Khater, chief economist at Freddie Mac. “We should have almost four million more housing units if we had kept up with demand the last few years,” Mr. Khater said. “This is what you get when you under-build for 10 years.” The WSJ also addressed recently, how to fix the problem, citing the Biden administration push to increase the supply of affordable housing by coaxing states and localities into easing restrictions on new construction, a bid to help address a historic shortage of new housing. A roughly $213 billion affordable-housing initiative in the proposed $2.3 trillion infrastructure plan includes a competitive grant program to target so-called exclusionary zoning laws that the administration says have inflated housing and construction costs and locked families out of areas with more opportunities. The grant program will be at least $5 billion, according to an administration official. “Allowing more small lot, entry-level single-family housing and townhouse construction would be an excellent way to add supply needed by aspiring first-time homebuyers,” added Robert Dietz, the chief economist of NAHB.

Source: Rise and Shred