The Root Causes of the U.S. Housing Shortage

The United States is currently facing a housing deficit estimated at between 3 to 5 million homes. This shortage was not created overnight; it is the culmination of more than a decade of underbuilding following the Great Financial Crisis.

The Post-2008 Hangover

Following the 2008 housing crash, new construction plummeted. Many homebuilders went out of business, and skilled labor left the industry, never to return. For over a decade, the U.S. built homes at a rate far below what was necessary to keep up with household formation.

Zoning and Regulatory Friction

Compounding the issue is the increasingly complex web of local zoning laws and regulations. Restrictive zoning often prohibits the construction of higher-density housing, forcing developers to focus on higher-margin, luxury single-family homes rather than entry-level product.